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16 members have voted
My situation: I'm just starting out life on my own, single & mid 20's, and it's looking like 3-4 Vegas/AC trips a year plus 5-6 to a local casino. I live very comfortably, with a proper savings rate (my dad's an accountant & raised me the "right" way), but I'd rather not get into specific details on a public forum. Gambling is my #1 vice and I currently have a running bankroll that I replenish whenever I need to that works out to be around 10-12% of my net annual income. So how I do it is, I play a fairly low variance craps game and will most likely quit after losing half my bankroll. This has yet to happen (honestly, I'm very disciplined) and I usually win or lose 10-15% of my bankroll - when visiting a local casino I win or lose a max of 5% of the bankroll. So basically, I go "big" in Vegas/AC and just wet my pallet locally.
If you actually read that last paragraph, I'm very grateful. If you feel the need to give me mathematical advice, as an engineer, I understand. However, I would appreciate off-the-cuff advice from real world experience a little more. I know there are a bunch of APers here and you people don't really apply, but I'd be very happy for you to chime in, I'm looking for someone who's been in a similar situation to help me out here.
I think there is a big difference between using your single, personal income, versus a combined family income, where you have higher income but much more commitments.
As you grow older, you can gamble with more, but I think only the most, let's say, "intense" gamblers would maintain a bankroll of that size.
I guess some people buy a season ticket for their football team, others might like opera - I have no idea what percentage this is - but the important thing is it spare money you're happy to lose and enjoy the entertainment.
Its entertainment for you. Its part food, part booze, part flashing lights, not much exercise, some variety ... as long as you keep good records you will know what is happening. Its a price for your entertainment.
Go downtown and you see panhandlers get up to twenty dollars and go buy in again. Their percentages are rather high. Yours are rather low. You got nothing to worry about. Now or later.
You seem to have a good handle on your finances and spending, and you mentioned savings comes before bankroll which is the right way. You are young so asking you to look ahead to retirement is going to be a hard stretch for you to do. My question for you to ponder is, "Will the money you spent gambling in your 30s be missed by the 70 year old you, in 2050?"
No matter how comfortable you live now, and how well your finances are managed, if you get to retirement and decide you are $100,000 short of comfortable, the gambling losses in your 30s perhaps could have covered that shortage. If you are the kind who would regret that decision later in life, you need to consider that now.
I am also reading between the lines and think perhaps your accountant father disapproves of the waste of money on stupid gambling vice ????
OTOH, as others have said, if you were going to set aside 10% of your income for discretionary fun spending, and you decide to use that fund for gambling, that is your personal choice. I like playing craps, and in your situation I would have put most all of my 'fun' money into craps, had it been available. But, I also tend not to look back and rue prior decisions. I try to learn from my past, to avoid repeat mistakes, but not fret over bad decisions.
For example, if you are 55 and make 100K/year but have no debt but your mortgage and little in savings, it's best to spend the majority of your free income (above your bills) on paying off your mortgage and building your savings so you don't have to worry about income during retirement.
I budget. That is, I have line items for all household income items and all expenses. All of my household expenses (including groceries) account for 60% of my income. After everything has been paid, the rest is put towards debt, additional savings (I already save 12% of my income automatically), and entertainment. The entertainment budget is set to allow for vacations, meals out, movies, golf, presents, and gambling.
Gambling right now is at the bottom of my entertainment list. It used to be at the top, before meals.
My entertainment budget right now is set to 10% of my net income. During my gambling addiction, it was set much higher but my debt was floating. People should enjoy themselves while they still can. Many people decide to do nothing until retirement and then end up sick or debilitated as they get old.
Quote: beachbumbabsIt might help to add up all your entertainment expenses for a few months, including ...premium cable... anything beyond savings/room and board/insurance/car payment, etc.
PREMIUM Cable is entertainment? Surely you jest. It is a basic necessity, like food, water, and shelter :-)
On retirement... I feel pretty good about it. Over the match and a pension (I'm a fed), all those articles in the news about how people 60+ have less than $100k saved up, without a pension, has done its job and sufficiently scared me. As long as I have enough for my future holodeck, I'll be fine.
On budgeting... this next year will really be a test for me. I spent the past year saving up for my emergency fund (6 months) and my bankroll. So I'll have to go to Vegas/AC a few times to see exactly how well I can manage this amount of money. I'm glad to see that 10% is at least within the ballpark. Then again, I may turn around and do law school in a couple of years which would just throw everything on its head.
Again, thanks, and on cable for football...
If you aren't a huge stickler for quality, there are ways to get every game on your computer...
1) Save and invest 15% of gross income.
2) Set aside money for--- food, clothing, shelter, utilities, transportation, personal care, etc.
3) Avoid debt.
Whatever is left, that's your bankroll.
Quote: DeMangoI'm going to pick up cable shortly for football season, but yes, that is not a necessity.
DirectTV has a promotion for free NFL this year with a two year contract... pretty good deal for new customers.
Quote: KeyserSoze1) Save and invest 15% of gross income.
If you are doing this, the rest will take care of itself.
As far as limitations, a player should look at what he is having to come up with to maintain that bankroll. IMO there is a limit to how much in gambling losses you should allow yourself to suffer. This is really a different thing than bankroll size.
Using credit cards for these items gives you a false sense of how RICH you are. Always pay cash for these items and you will really see how RICH you are.
If you can't afford to pay cash for gasoline, you can't afford to go anywhere...You aren't RICH.
If you can't afford to pay cash for food, including restaurants, than you can't afford to eat...You aren't RICH.
Quote: FatGeezusThe best advice I ever heard was "never use a credit card for buying gasoline or food".
Using credit cards for these items gives you a false sense of how RICH you are. Always pay cash for these items and you will really see how RICH you are.
If you can't afford to pay cash for gasoline, you can't afford to go anywhere...You aren't RICH.
If you can't afford to pay cash for food, including restaurants, than you can't afford to eat...You aren't RICH.
Way oversimplified IMNSHO.
Our strategy is to net down exposure at the grocery store with weekly specials and coupons and then pay with a CC that offers a % cash back, of course always paying the balance monthly to avoid interest charges.
The grocery store offers 10 cents off per gallon of gas per $100 plus frequent offers of additional cents off for certain items and/or coupons. So when we fill up typically getting 30 - 50 cents off per gallon and pay with the same CC for the cash back.
Thus the CC offers convenience in paying as compared to cash, the bank mails me a check every few weeks as I hit the cash back trigger, and periodically download the statements categorized by expense so over time I know precisely what it costs for gas, food/household items etc. so budgeting is simplified and exact.
Quote: FatGeezusThe best advice I ever heard was "never use a credit card for buying gasoline ...".
Boy did I ever used to believe in that one as an article of faith.
I changed, but for someone starting out on their own, it's not bad advice.
Quote: odiousgambitBoy did I ever used to believe in that one as an article of faith.
I changed, but for someone starting out on their own, it's not bad advice.
It's a good idea for anyone that can't afford to payoff their credit card monthly. If you can pay off your credit card monthly, then take the rewards from your card. This quarter I get 5% off of gas.
Quote: FatGeezusThe best advice I ever heard was "never use a credit card for buying gasoline or food".
Unless you have enough money to pay off your credit cards every month, and the card is just a convenience so you don't have to carry around a lot of money. I can't remember the last time I paid cash for gasoline.
Quote: FatGeezusThe best advice I ever heard was "never use a credit card for buying gasoline or food"
Advice I gave my kids: Never, ever run a balance on a credit card. Always pay it in full with religious devotion. Credit cards are a useful convenience, but they become a trap if you run a balance. If you fail to pay in full just one time it sets a psychological precedent and you are vulnerable to the trap to the trap from then on.