Many people struggle with their personal finances, but recent trends show that it’s often for the wrong reasons. A report on bad spending habits notes that nearly 40% of young adults spend their money on experiences than necessities like paying bills, just to share their enjoyment via social media. With the rising cost of living and inflation, it has become all the more important for people to balance their finances and prepare for any financial emergencies.
Surprisingly, poker might teach people a thing or two about valuing cash and maximizing each dollar they have. Through these games, people can learn and gain transferrable real-world skills which can benefit them in other aspects of their life. Not only do they learn good values like sportsmanship and patience, but poker players also get the opportunity to learn the value of each chip and their finances. Here are some money tips you can learn from playing poker:
Keep to a budget
Before you start playing poker, it’s essential to set a budget to ensure you don’t overspend during your games. Although it may be tempting to keep playing to retrieve your losses, setting a stop loss limit can prevent you from losing out more, especially when you’re having a bad run. Similarly, you should also set a budget for your needs and wants in real life. If you’re having difficulty saving, you can set up automatic transfers of your money towards a savings account upon receiving your salary. This allows you to invest in yourself first, while limiting what you can spend for your wants.
Being careful with lending out your money
As you continue to grow your nest egg, someone may eventually ask to borrow some cash with the promise to return it soon. One key poker bankroll management tip, however, is to be very careful when you’re asked for a loan. Among poker players, there’s a fair chance loaning to a friend may lead you to discover they aren’t as skilled as you hoped — and lose your bankroll in the process. Likewise, not even friends and family can be completely trusted to pay back loans on time, all the time. If you’re not completely comfortable lending money to someone, it’s better to say so. There may be initial discontent, but this can help you avoid financial problems and prevent relationship damage in the long run. On the other hand, if you’re willing to provide a loan, make sure to draw up a contract so the responsibilities are clear between you and the borrower.
Taking calculated risks
Poker is a game that involves risk. It’s impossible to have a 100% chance of winning, so it’s all the more important to understand what stakes you can handle. Professional poker player Maria Ho recommends playing poker to learn about risk management, where you first assess a situation, such as your opponent’s body language or the odds for each hand, before making an intentional bet. Many things in life are unpredictable, especially money, so remember to only stake what you can afford to lose.
Poker games can be very exciting, especially when you’re on a winning streak. However, it’s important to not be overconfident in your moves lest you make mistakes and lose out. If you are skittish and impulsive in your decision-making, it’s much more difficult for you to control how you play on the felt. Similarly, money management requires a good set of priorities and a level-headed mind. While you may be tempted to invest in popular currencies like Bitcoin to reap big rewards, it’s important to be patient and do ample research before putting your money in a volatile asset. For other big purchases like gadgets, it’s best to take more than two weeks to assess your financial situation before buying them.