For better or worse, sports betting sometimes gets a bad wrap — especially from personal finance gurus. Some even like to compare gambling with burning money.
As with most things, the actual truth is somewhere in the middle. While gambling isn’t as advisable as, say, contributing to a 401(k) retirement account or investing into exchange traded funds (ETF), it’s also not a complete money-loser either.
Done responsibly, wagering can be a side hustle that provides both entertainment and extra spending money. The responsible aspect is what we want to focus on here.
We’ve rounded up the five must-follow tips for responsible sports betting. And let us preface, this translates to all forms of sports wagering like NFL betting, NBA, parlays and, heck … even eSports gambling. Follow these hard rules and believe us, you won’t burn a hole through your pocket, betting-wise.
Rule #1: Gamble With Fun Money Only
This is a big one: only risk money you don’t immediately need to use. Therefore, money that goes toward paying mortgages, rent, insurance, groceries, etc. should never — under any condition — be gambled with. Seriously.
When you wager with essential funds, you introduce emotion into betting. Suddenly, you need to win a football bet or else you’re at risk of missing a loan payment, for instance. Do-or-die pressure such as that crumbles most gamblers, which leads to bad decision-making. So play it safe and only bet with leftover money — the same kind you’d use for a night out for drinks or a TV subscription.
Rule #2: Never Risk More Than 9% Of Your Starting Bankroll
What’s the oft-repeated rule in investing? Diversification, right? The same applies to the world of betting. In either endeavor, you never want to put all your eggs in one basket.
Flat-out, that’s just too risky. Sure, you could win an NFL spread bet and double your money. But the opposite result would completely crush you. Without any money leftover, you’re effectively out of the betting game. So figure out what your total spending money is for gambling and never risk 10% or more of it on a single bet.
Rule #3: Track Wins & Losses Closely In A Budget
If you’ve read through our site enough then you probably know how to create a budget that includes revenues and expenses; you’ll need to create a similar system to track your betting performance, too.
For starters, a budget will help keep you on track to follow rule two. But even more importantly, you’ll also learn what’s working and what’s not. We suggest adding notes to the budget to see where the gains and losses are coming from. For all you know, you’ll discover the NBA is where the bulk of your wins come from and that’s where you should focus your attention on.
Rule #4: Keep Emotions In Check
We touched on it briefly before, but emotion deserves its own rule. And here’s a spoiler alert: betting on sports is as much about managing your emotions than analyzing games and players.
A common gambling no-no that’s financially irresponsible is “chasing” losses. How it manifests itself is bettors over-risking on the wager after a loser in an effort to “make up” for the previous loss. Do this enough times and you could break our trusty rule number two from before.
That’s just one example of emotions costing bettors, but there’s plenty more. In this regard, gambling overlaps with the stock market plenty. Both demand players stay level-headed despite the ups and downs of each.
Rule #5: Do Your Research Beforehand
This one’s self explanatory but worth repeating: know what you’re betting on. Don’t just wager on an NFL game because you like a certain player or your neighbor says this or that team will win.
Do research before making a pick — and a lot of research, too. The more informed you are, the better chance you can guess the eventual outcome whether that’s a straight-up winner or over/under on points scored.
If you just follow these five rules, you’ll be a responsible bettor. Being responsible means you won’t beat yourself while gambling, which honestly, is half the battle.
Photo Credits: (horses) Mike Boswell; (calculator) stock photo