The Smart Way To Manage Your Bankroll

Bankroll management is a key part of any sports betting strategy of the shrewd bettor. If you bet your whole bank, or half of it, on one bet, you depend big time on the outcome of that bet. If it’s negative, you are much more prone to crossing the boundaries of the budget you can afford to dedicate to sports betting, which may lead to personal problems.

Additionally, like any other sports bettor, a long losing streak may hit you every once in a while. Hence, the size of your sports bets with regards to your bankroll should acknowledge that.

What is betting bankroll?

Your bankroll is the amount of money you have at your disposal for sports betting.

This amount is determined by yourself in line with your budget. The initial amount may be a percentage of this month’s salary, or you could save money over a few months so that it can be larger.

In most of the cases, the bigger the size of the starting sports betting bankroll, the bigger the size of your potential profits. Also, depending on your results, you can either add more funds to your bankroll or withdraw any winnings made on a regular basis.

Managing your betting bankroll means deciding what portion of it to allocate for each of your sports bets. Doing this in a smart way is essential for a successful sports bettor.

Why do you need to manage your sports betting bankroll?

To put it quite simply, if you don’t have a clear management plan of your bankroll, it’s highly likely that you are going to waste all your money sooner or later. People without such a plan usually bet improper amounts per bet.

A very common case is having $200 with the firm belief you’ll turn it into $400 overnight. It’s Champions League night and there are three picks you’ve targeted – two in the early and one in the late kick-off times. You judge that staking $50 on each of the early games is reasonable. After all, you have a good feeling these bets will come off – the first providing good value at odds of 2.00 and the second being a “lock” at 1.40.

Unfortunately, both of these lose, you shake your head in disbelief, and boldly wager the remaining $100 on your final bet of the night because, surely, you’re due some luck. The odds of your selection are at 3.00, all is good for most of the match but an unfortunate own goal in the 89th minute leaves your pockets empty. You’ve spent your whole bankroll on only three bets, and losing three consecutive bets is nothing to be ashamed of as it often happens to the best in the business.

Proper sports betting bankroll management requires discipline and patience. It requires an analytical approach that makes sure you are not out of the game in one night. Following such an approach is a fundamental stop in your journey towards sports betting greatness.

Bankroll management is a vital component of any sports betting strategy

How much should you bet on each sports event?

A popularly advised range is 2-5% of your total bankroll, and for a good reason. By betting 2-5% you are thinking long-term rather than short-term because you will have many more bets left to make using your remaining bankroll in case your first bet doesn’t win. Read on for specific examples below.

Keeping your sports bets within that range means you have a much more consistent staking plan. This is sustainable, as opposed to potential chaotic bets which exceed the range, either with the purpose of chasing losses or betting substantially more than appropriate because you’re 100% sure about the outcome of the game you’re betting on.

The percentage of your bankroll that you choose to follow represents your maximum bet. This is because not all bets will have exactly the same stake. You need to judge how much to allocate to each bet.

It would be unwise, for example, to bet $20 both on a 1.50 priced favorite and on a 5.00 priced underdog. It’s more likely that the underdog bet will fall short, and even if you win the first bet, you will be at a $10 loss when both bets are settled. To address this variance in winning bet probability, it’s more appropriate to bet more on the favorite and less on the underdog in order to balance your risk. The concept of betting units comes to assist here.

What is a betting unit?

A betting unit is the tool that helps you to distribute your funds properly. For that purpose, we are using a grading scale. The example provided in the table below uses a 1-5 scale to represent our confidence in each sports bet. However, this is not a rule set in stone and you can use a 1-10 scale if you prefer.

One unit usually means a confidence level of 1 out of 5 which corresponds to your minimum bet. On the contrary, five units denotes a confidence level of 5 out of 5 which is equivalent to your maximum bet which, in turn, is 5% of your sports betting bankroll.

You have flexibility to tweak this according to your preferences. For example, you’ve got a sports betting bankroll of $600 and your maximum bet is 5% which is $30 and you are happy with that as you’re not willing to risk more. If that is confidence level 5/5, meaning a bet of five units, this means one unit equals $6. However, let’s imagine $6 is too low of a stake for you and you feel comfortable placing $10 for your minimum sized bets where you’re making brave selections, picking underdogs etc. You could amend your bankroll management system like this:

Starting bankroll$600
Bet size with 5/5 units$30
Bet size with 4/5 units$25
Bet size with 3/5 units$20
Bet size with 2/5 units$15
Bet size with 1/5 units$10

Your maximum bet would be 5% of your bankroll, whereas your minimum bet would be 1.67% of it. You can now assign an occurrence probability for each of your bets.

You wish to back Rafa Nadal to win the Roland Garros final in straight sets? That’s maybe 5/5 so you could afford to splash $30 on that bet.

Backing Tottenham to beat Watford away from home? It’s probable, however Watford are a tough nut to crack at home, so this selection maybe warrants a bet with 3/5 units.

Betting on a surprise draw when Juventus play at home to Parma? Highly unlikely, but you have your arguments and research to justify the attempt, so you go ahead with the minimum bet of 1/5 units.

You should use your knowledge on the sport or league you are betting on. Whenever you experience difficulties defining how many units to allocate to a bet, you can use the odds to give you a hint. An example may be that every selection with odds above 3.50 should be made with 1/5 units.

The exact odds and numbers are a personal preference depending on your situation. What is important for your long-term presence in the sports betting arena is that no bet should exceed the upper limit of 5% of your total bankroll.

Again, the 2-5% range is widely advised and preferred by many bettors. However, other gamblers bet as much as 10% as their maximum bet. In my opinion this is too much and 5% is more than enough for sustainable sports betting which keeps your temper intact in case you go on a streak of several consecutive losing bets.

Betting bankroll management – example

There are two potential problems with everything outlined thus far and one solution that successfully addresses both of them. If each of your bet stakes is a strict number set as a percentage of your bankroll:

  • your stakes will consist of “ugly” numbers (e.g. $14.64 instead of $15; $29.83 instead of $30 and so on)
  • starting with a losing streak will impact your profitability

To illustrate this, here are a few scenarios using the scale from 1 to 5 mentioned earlier and the same $600 starting bankroll.

Scenario 1 – Five winning bets followed by five losing bets

Bet #Units% of bankrollStakeOddsOutcomeReturnWin/LossBankroll left
14/54.17%$251.95Won$48.75$23.75$623.75
21/51.67%$10.423.75Won$39.07$28.65$652.40
32/52.50%$16.312.5Won$40.77$24.46$676.86
45/55%$33.841.8Won$60.91$27.07$703.93
53/53.33%$23.442.2Won$51.57$28.13$732.06
62/52.50%$18.302.5Lost$0-$18.3$713.76
74/54.17%$29.761.95Lost$0-$29.76$684
83/53.33%$22.782.2Lost$0-$22.78$661.22
91/51.67%$11.043.75Lost$0-$11.04$650.18
105/55%$32.511.8Lost$0-$32.51$617.67

Profit = $17.67
ROI = Profit / starting bankroll = $17.67 / $600 = 2.9%

Scenario 2 – Five losing bets followed by five winning bets

Bet #Units% of bankrollStakeOddsOutcomeReturnWin/LossBankroll left
14/54.17%$251.95Lost$0-$25$575
21/51.67%$9.603.75Lost$0-$9.6$565.40
32/52.50%$14.142.5Lost$0-$14.14$551.26
45/55%$27.561.8Lost$0-$27.56$523.70
53/53.33%$17.462.2Lost$0-$17.46$506.24
62/52.50%$12.662.5Won$31.65$18.99$525.23
74/54.17%$21.901.95Won$42.70$20.80$546.03
83/53.33%$18.182.2Won$40$21.82$567.85
91/51.67%$9.483.75Won$35.55$26.07$593.92
105/55%$26.701.8Won$48.06$21.36$615.28

Profit = $15.28
ROI = Profit / starting bankroll = $15.28 / $600 = 2.5%

You can see how the bad start in the second scenario loses you money in the long term. In our example it’s 0.4% ROI over 10 bets. This is because in the unfortunate case of starting with a bad streak, you need to play a catch-up game until you recover when your stakes can be higher again. This is the first problem.

The second issue is all the ugly numbers you see in the tables. You can’t calculate the exact number of each of your bets like that, otherwise your will go nuts because it’s tiring.

To overcome these two drawbacks, you should bet with your default unit stakes for a longer period of time. Let’s see what happens if you start with a losing streak again, but this time betting only with your original amounts, as if your bankroll was “frozen” at $600.

Scenario 3 – Five losing bets followed by five winning bets using default bet stakes

Bet #Units% of bankrollStakeOddsOutcomeReturnWin/LossBankroll left
14/54.17%$251.95Lost$0-$25$575
21/51.67%$103.75Lost$0-$10$565
32/52.50%$152.5Lost$0-$15$550
45/55%$301.8Lost$0-$30$520
53/53.33%$202.2Lost$0-$20$500
62/52.50%$152.5Won$37.50$22.50$522.50
74/54.17%$251.95Won$48.75$23.75$546.25
83/53.33%$202.2Won$44$24$570.25
91/51.67%$103.75Won$37.50$27.50$597.75
105/5/5%$301.8Won$54$24$621.75

Profit = $21.75
ROI = Profit / starting bankroll = $15.28 / $600 = 3.6%

You see how continuing with your default stakes despite the first five losing bets yields you 1.1% higher ROI over 10 bets. The overall ROI in the last example is 3.6%. Maintaining similar returns over the next 10 bets would double that to 7.2% which is more than a good enough ROI. Moreover, all the numbers you are betting with look neat which doesn’t cause you constant difficulties calculating each of your stakes.

Betting on sports with proper management of your bankroll increases your chances to generate profit. In the case of losses, they will be controlled and easier to bounce back from. The final piece of this puzzle is to measure your performance and take any necessary actions.

Assess your results regularly and readjust your numbers

You have to assess where you are standing after a certain time frame (a week, two weeks, a month etc). You’ve started your sports betting journey with at least a vague idea about a monetary amount you would like to win for a set period of time. Depending how close to or far away from that goal you are at that point, feel free to make some adjustments. Here are a few possibilities:

  • Increasing your initial sports betting bankroll. If you’ve had a good profit, you can reinvest that into your bankroll. For example, winnings of $200 can be added to the initial bankroll of $600 which will transform the bankroll to $800. As a consequence, your maximum bet (if you’re following the 5% limit) will now be $40 instead of $30. Maintaining the same ROI will enable you to reach your profit targets quicker. Another source of funds to increase your bankroll may come directly from you. For example, you make an additional deposit in subsequent months using funds saved exclusively for sports betting.
  • Keeping your initial sports betting bankroll the same. If you’ve had a good profit, you may withdraw it and spend the earned money for personal expenses. Then you may continue betting with the same initial bankroll and the same stakes. If you’ve had a losing month, it’s not wise to chase your losses, and in most of the cases the best thing to do is to give more time to your sports betting strategy and continue with the same bankroll and betting stake levels pursuing better results.
  • Decreasing your initial sports betting bankroll. If you’ve accumulated losses which make you feel uncomfortable, you should be responsible and acknowledge that. If you started with $600 but now only $400 of them are left, you can use that as your new base bankroll and change your maximum bet from $30 to $20. Alternatively, you can stop betting temporarily until you recharge your account with fresh funds next month that you can afford, and get your bankroll to its starting level.

Everything depends on your personal situation – the size of the initial bankroll and the adjustments you make. Some people can afford to start with a $100 budget, others with $1,500. The important part is to manage the bankroll efficiently and give yourself the best possible chance for profit and success.

Your bankroll is your sports betting tool

To bet on sports events, you need money. You can’t make your next desired sports bet if you don’t have funds for that. Shrewd bankroll management is an absolute necessity. It’s your most trusted advisor in your quest to boost your betting success. It’s the sustainable tool that makes sure you don’t go broke when you are in a bad period and, in addition, enables you to manage smartly the additional income you’ve earned from sports betting.