Managing your bankroll is vastly underappreciated and not talked about often enough in the poker world. The following are a few tips to help you learn how to manage your poker bankroll:
#1 – Your bankroll should be taken very seriously. Let's say you were the owner of a business, would you not treat your expenditures and expenses seriously? You should do the same with your bankroll as it is the capital for your poker business. Try not to spend money that should be used for poker for a trip to Australia or Rome. Try not to spend money that should be used for poker for a trip to the hottest nightclub where you buy bottle service for you and your buddies and end up dropping 5K. These are serious leaks in many poker players’ bankrolls and is a big reason why they end up going broke.
#2 – Set aside a percentage of any profits you have for personal enjoyment. While it's important to not touch your bankroll for extravagant expenses, if you've had a good month, you deserve a reward. There's nothing wrong with taking 25% of your profit (after paying all your expenses and bills of course) each month and having a good time. You work hard... enjoy yourself now and then.
#3 – At the same time, it's important that you take a percentage of your profits and put it back into your bankroll. Let's say for example that after all your expenses were paid, you had $5,000 in profit. Take $1,000 of that for fun and put $4,000 back in your bankroll. What this does is allows you some protection for the inevitable bad run (and every poker player has these, no matter how much they might tell you that they don't). If you go on a bad run and lose $3,000, you'll still be up $1,000 rather than being down $3,000 – just this can make the difference between playing scared and playing correctly.
#4 – Move up in limits when you have tripled your initial bankroll. If you're winning at a lower level, there is no reason to move up until you have more than enough capital (or bankroll) to do so. The swings at the higher limits will be more drastic so you need to be prepared to handle them.
#5 – If you have moved up in limits — and lose ½ the bankroll you started with at that limit, move back down to the limit you were playing before. Take the time to figure out what is wrong without it costing you your entire bankroll.
#6 – Avoid jumping multiple limits just because you had a really good or bad run. Many players make the mistake of getting greedy and playing over their head because they either want to make a lot of money quickly because they are running so good or to make up for losses they have suffered. All this usually adds up to is losing more money.