Money management can be difficult at times, but what would you say if someone told you that an outside hobby could help develop better habits to look after your cash more responsibly?
There are plenty of hobbies that can help you with money management, from playing Monopoly to video games that have aspects of in-game currency to consider during play. In fact, more and more hobbies can help you improve your own financial management, with one popular card game especially good at doing just that.
If you’re a poker player, you might already have what you need to be able to help get things in order. Here’s a look at four ways that poker can teach you how to manage money more effectively.
Budgeting
Looking after your budget is critical; it’s important to ensure that the funds are there to finance home life, education, health care, and hobbies. But many times it is easy to get into the habit of not factoring in the small expenses.
Regular players soon learn every chip is precious; bleeding small chips can get you right out of the game. So, consider this, if you’re at the poker table, it’s essential never to put more money on the table than you can afford to lose. Obviously, the same goes for life and budgeting. Spend within your means.
Managing Risk
Remember “The Gambler” song by Kenny Rogers?
You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
And know when to run
This is true in all aspects of life. No one can eliminate risk from their lives. After all, if you’re considering investing money, that’s a risk. But, poker can teach when to show patience and restraint. You need to know when to go all-in, check, or cash out. Or know when to “hold em, to fold em or when to walk away”.
Investments are the same; no lucky winning streak continues forever, meaning you’re never guaranteed to get the win. One of the first things aspiring pro poker players learn is to have their finances in order before entering games or tournaments. They know the risk of the game and don’t get involved unless they have enough to withstand some loss, play the game out, and ultimately get a shot at a profit.
Or think of this when going in to buy a home, a new car, or even like the super Black Friday Sale. Keep these steps in mind for any event that could be highly emotional and dangerous for your pocketbook.
The best players at the table keep their eyes open, listen, and walk away if need be. It’s a lesson in not entering costly or risky ventures without the means to handle them.
Maintaining a Level Head
It’s improbable you’ll get good at poker if you’re unable to keep your emotions in check, are a little lively at the table, or are prone to impulsive decisions. If you can’t manage to maintain some sort of balance and get caught up in the game without staying level-headed it can be disastrous.
But that’s not just in your own thinking. In life, you have to stay mindful of not getting drawn into something based purely on the decisions of others at the table. Sound familiar? How often is it easy to be caught up in the influence of social media?
Accounting
More and more people are leaving their jobs and starting their own businesses or going freelance., Whether your working at a job, freelancing, or involved with a hobby, one given is filing taxes. When it gets to April, many people find it difficult when they suddenly realize around 20% of what they earned now needs to be paid in tax. Top poker players are always aware of this, as taxes aren’t automatically deducted from their winnings, and those earnings can differ hugely from year to year. They can often change their strategy based on their performance, and they will take advantage of tax deductions by itemizing buy-ins, travel costs, and other incidentals. Tax season is when you know how well you managed and prioritized your spending throughout the year.
Conclusions About Money Management
Having a hobby such as poker can often bring joy and sharpen the mind. Best of all, undertaking those passions for any new skill is a reminder of the value of learning new things, challenging your brain and transferring those learning and confidence aspects to managing your money.
Remember, when new financial and other challenges show up in your life, like poker, you need to think clearly, be discerning and…
know when to hold ’em
Know when to fold ’em
Know when to walk away
And know when to run