Why You Should Open a Separate Bank Account

Bankroll management is crucial towards making your gambling funds last. It also helps you avoid the temptation to risk more than you can reasonably afford to lose.

Much has been written about bankroll management over the years. You can easily find resources that will help you better handle gambling funds.

However, one unspoken tip involves opening a separate bank account for your bankroll. This concept comes from the famous business book Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine.

I’ll discuss more on bankroll management principles below along with how Profit First’s advice truly adds something to the subject.

How Do Gamblers Normally Manage Their Bankrolls?

Not everybody who walks into a casino, poker room, or sportsbook cares about bankroll management. In fact, some people go into the matter completely blind.

They bring a random amount of money and have no plan for how to gamble it. This scenario can lead to chasing losses and blowing too much money.

If you’re dedicating time to managing your bankroll at all, you’re already ahead of the curve. But then again, there’s always room for improvement.

A typical bankroll plan involves going through your finances first. The goal here is to determine how much you can comfortably risk.

Of course, you hope to win with any gambling venture that you embark on. But you also need to be realistic because, most of the time, you’ll be dealing with negative-expectation bets.

As a result, you want to ensure that you’re prepared to lose anything you put into real money gambling. This is the big reason for separating betting funds from money that’s meant for bills, utilities, and any other expenses.

The next step is to decide how much you’re comfortable risking with each bet. This process depends upon how long you want your bankroll to last and what volatility you’re comfortable facing.

Slots bankroll management, for example, is going to be different than baccarat money management. Therefore, you should adopt varying plans for each casino game or type of gambling.

Plenty of finer elements go into managing your bankroll, which I’ll cover later. However, you can at least see the basics here.

The Biggest Problem with Classic Bankroll Management

As discussed above, the first step to proper bankroll management involves separating gambling funds from finances. The last thing you want to do is risk money that’s needed elsewhere.

Perhaps you’re disciplined enough to avoid dipping into your main bank account for more betting funds. However, the chances of doing so increase when you draw everything from the same account.

Many gamblers have carefully mapped out a bankroll plan only to still fail and bet too much money. The same people would be better off if they’d just open another bank account.

Solve the Problem with a Separate Bank Account

Profit First is a book that focuses on helping small business owners better manage their revenue. Author Mike Michalowicz was once a struggling been a business owner himself who hit rock bottom financially.

It was only when he developed a plan for better handling his profits that he dug out of this hole. His advice might be meant for businesspeople, but it helps with gambling too.

One key piece of advice that Michalowicz offers is to set up different bank accounts for different aspects of the business. For example, you might open one account for general revenue, one for tax money, and another for pure profits.

The latter element is what many business owners are missing. They keep profits in the same account as their revenue.

Mixing profits with revenue increases the chances that one will take unnecessary risks. For example, a dress shop owner may try a new dress line just because they have extra money.

According to Michalowicz, a better path is to put profits into a separate bank account. This method ensures that business owners won’t be so tempted to immediately risk their money.

Instead, they put money into a rainy day fund of sorts. They conserve funds as a result and will have extra money for any future emergencies.

The same concept can easily apply to gambling. When you separate your bankroll from finances, you’re much less likely to dip into funds that are meant for expenses.

Here’s an example on how to set this up:

• You make $4,000 per month.
• After examining your finances, you have $400 in expendable income each month.
• You put $200 of this amount towards gambling.
• You make a $200 monthly deposit into a separate bank account that’s only for gambling.

Of course, you can’t guarantee that you won’t get weak and eventually link your main account to an online gambling site. But the chances of doing so are less likely when you set clear boundaries between main money and betting funds.

Other Tips for Properly Managing Your Bankroll

If you’re willing to set up a separate gambling bank account, then you’re well on the way to becoming a bankroll management master. However, you shouldn’t forget the following fundamentals either.

Determine How Much You Can Afford to Lose

Again, you should always comb through your finances before hitting the casino or sportsbook. You absolutely need to divide expense money from expendable gambling funds.

Here’s an example on doing so:

• You earn $3,500 per month
• You go through your finances to determine what’s expendable.
• $500 goes to rent/house payments.
• $1,000 goes to utility, phone, and internet bills.
• $1,000 goes to groceries and other necessities.
• $400 goes to miscellaneous entertainment.
• $100 goes towards gas.
• You have $500 left over each month.
• You decide to use $300 of this amount for a starting bankroll.

You may have more-detailed expenses to go through than what’s presented above. But the point is that you should spend at least 15-30 minutes figuring out how much you can comfortably risk.

Run the Math on How Long Your Bankroll Will Last

After settling on an expendable bankroll, you should do the math on how long your funds will last. For this, you must have a game and average bet size in mind.

Here’s an example on figuring out how far your money will stretch:

• Your bankroll is worth $400.
• Your favorite online slot has a 4% house edge (96% RTP).
• You make $1 bets.
• You perform around 500 spins an hour.
• 500 x 1 x 0.04 = $20 in hourly losses
• 400 / 20 = 20
• Your bankroll will theoretically last for 20 hours.

Keep in mind that this math is all theoretical. But provided you do the calculations, then you’ll at least have a rough idea on your bankroll’s shelf life.

Set Stop Win & Stop Loss Limits

You likely don’t want to blow your entire bankroll on one trip to the casino. Therefore, you should set a stop-loss limit on when you’ll quit a session.


Here’s an example on such limits:

• You have a $300 bankroll.
• You never want to lose more than 20% of your funds in one session.
• 300 x 0.2 = 60
• You’ll stop any session when you lose $60.

Stop-win limits are also worth consideration. They allow you to bank profits after a successful session rather than continuing to risk them.

As seen below, stop win works much like stop loss, except in reverse:

• You have an $800 bankroll.
• You want to bank any profits worth 20% of your bankroll.
• 800 x 0.2 = 160
• You’ll stop any session when you win $160.

Take Advantage of Bonuses & VIP Rewards

Many casinos, sportsbooks, and poker rooms give back a percentage of the money they make. You definitely want to put yourself in line for these freebies to help pad your bankroll.

Here’s an example:

• A sportsbook offers a 100% match bonus worth up to $100.
• You deposit $75.
• You’re now in line to earn a $75 bonus.

You do need to meet terms and conditions before cashing out money from these offers. Nevertheless, it’s worth satisfying T&Cs if you’ll be gambling online anyways.

VIP rewards are available in both internet and brick-and-mortar gambling establishments. They’re based on how much action you give a sportsbook, poker room, or casino.

You’ll automatically be enrolled in a loyalty program as soon as you deposit at online gambling sites. But you must make sure to sign up for the player’s club when gambling at land-based venues.

Conclusion

Bankroll management always seems so effective in theory. However, it becomes difficult when you’ve suffered a big losing session and are desperate to win back losses.

These are the situations where your resolve is really put to the test. Assuming you fail the test, then you’ll start betting money that’s needed for expenses.

A good way to prevent this problem is to open a separate gambling account. This account will contain betting funds and nothing else.

A separate account isn’t a foolproof plan. But it does put another barrier between you and the money in your main bank account.