A Relationship Between Personal Income and Gambling?

Got this email from a fellow sexy reader, wondering how gambling may fall into the whole budgeting equation here. Which I personally find AWESOME because it A) means he’s not an addict! (Anyone who formulates a plan before betting everything on black has a good head on their shoulders in my eyes ;)) and B) means we get to talk about poker and blackjack today! Yay! Stuff we normally don’t get to talk about here on a finance blog… I believe the last time we did was with our confessions of a professional poker player series? Like, 4 years ago??? Jeez…

So let’s get this party started!


Is it possible to make a direct (and logical) correlation between gross income and the maximum amount of money that one can (or should?) use for gambling purposes?

A majority of folks would probably take the stance that gambling is stupid and any amount > 0 is too much. However, for those who find it as entertaining as I do, there has to be a relationship between personal income and gambling stakes. For example, if someone makes $50k a year, he probably isn’t playing $1000/hand in blackjack. But what should this person be gambling with, per bet and as a percentage of income?


I think it has more to do with your personality and risk tolerance than it does gross income or an amount to set aside for gambling. I wouldn’t play $1,000 blackjack hands whether I was making $50k or $500k! Haha… but that’s cuz I’m more financially conservative – even though I LOVE me some casinos. I’d rather plop down at the Hold ’em table with a $100 pot and see how large I can grow it instead. And then maybe if I was up a few hundred or so I’d be making larger – $100+ bets – within the game over the one time drops in Blackjack. Which always sucks my money anyways :)

Gambling aside, though, I DO think it’s smart to put a certain % aside to do whatever you please with it so you can keep sane and generally happy. Whether it has to do with playing blackjack, or buying fancy widgets, or even splurging on $100 bottles of wine. The *what* doesn’t really matter so much, as does the mentality and being OK with some “play” money. And 5% of, say $100k, is going to be a LOT more money to have fun with than 5% of $30k! But that’s okay – it’s the way budgeting works and only motivates you to keep on pushing forward and growing that income of yours.

Another route you can go is to just increase your “entertainment” budget portion too, if you don’t have or want a “fun” section, for example. Cuz really that’s what gambling is at the end of the day: money in exchange for exhilarating entertainment, only with a chance to win some money in the end! Which you then replenish your fund with and keep on going strong – as long as you’re not one of those people who goes back and forth to the ATM every time you lose your allotted amounts ;)

That’s how I handled our weekly poker nights back in the day when Texas Hold ’em was all the rage – remember that? Even my MOM was getting into it! Haha.. I gave myself something like $20 every week to play, but once it was gone it was gone and if I ever came home with anything (about 25% of the time) it would go right back into replenishing this fund in case my budget got lowered down the line. It kept me both sane, and in check.

Those are my thoughts anyways…

Any gamblers want to chime in? Or anyone else with an opinion for our blackjack friend? :) As always, better to do stuff like this in moderation than to the extreme. Unless you’re a professional at it like my friend… who I should actually follow up with and get an update for us! I wonder if he’s won any big tournaments or jackpots lately?

(Photo by Travis Isaacs)

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  1. My Financial Independence Journey May 1, 2013 at 5:54 AM

    The maximum amount that anyone should gamble is zero. That being said, some people find gambling to be fun so they should budget for it just like they would budget for vacations, movies, or fancy dinners. I leave the exact percentage up to you.

  2. Lance @ Money Life and More May 1, 2013 at 7:24 AM

    I say make a reasonable entertainment portion of your budget and use that. I wouldn’t use a % per hand or anything like that though because if you go on a losing streak, you can still play .05% of your annual income per hand but 2,000 hands of losing and your whole annual income is gone!

  3. Greg@ClubThrifty May 1, 2013 at 7:34 AM

    I’d say a reasonable amount is whatever you feel you can afford to lose…and no more. If you are bringing $200 to the casino, be sure that $200 is in your entertainment budget to lose. For almost everybody, gambling is entertainment. If you win, that just makes it all the more fun!

    1. J. Money May 1, 2013 at 11:43 AM

      I like that answer – that’s pretty much what I do too.

  4. Free Money Minute May 1, 2013 at 7:40 AM

    My two cents: If you are going to gamble, make sure it is for entertainment purposes only and is an amount you can easily afford to lose. If you are trying to build wealth, I would steer clear of the gambling table as it is not where wealth is created. You ever wonder why casinos have luxurious spaces?

  5. Brian May 1, 2013 at 8:29 AM

    My wfie and I go to Vegas 1 – 3 times a year (it all depends on if she has to go for work and I tag along!). Neither of us are hardcore gamblers, but we do enjoy it. I am pretty much even-Steven and she is the lucky one who usually comes back ahead. We are pretty small patatoes in the gambling world. We usually just set aside some entertainment money and take it. I also use the cash back I have been getting from a rewards credit card too. We take advantage of promotions (last year we stayed in a suite at Paris Las Vegas, that had a view of the tower and the Bellagio fountains, for $50 out of pocket because of a promotion we did over the summer).

    I also disagree with you have to assume you are going to lose it. Most people probably will, but if you stick to “winnable” games like blackjack and poker and know what you are doing you can walk away with a lot of money. There is a reason people are pros at both those games

    1. J. Money May 1, 2013 at 11:44 AM

      True true… at least with the games of more skill vs slot machines and pure luck.

  6. Jane Savers @ Solving The Money Puzzle May 1, 2013 at 8:46 AM

    Can people make money gambling? I would be interested to know if the average Joe can play to win and walk away if they are ahead or walk away when they have lost the budgeted gambling pot and not whip out the credit cards.

    I like to play Blackjack online – the free play no money but I always win and it is tempting to see if I could win if there was real money on the table.

    1. J. Money May 1, 2013 at 11:46 AM

      That’s the hardest part for me to be honest – walking away when you just won! Especially if it’s early on and you just got there :) I once won like $200 in poker but it had only been 5 mins and I didn’t want to leave cuz I wanted to have fun still! So I told myself I’d rather play and lose it all in the next 3-4 hours sitting there than walking away with an extra $200. And so I played and I eventually lost, haha… But it sure was fun! And a good portion of it went to the $1.00 drinks too ;)

  7. Shafi May 1, 2013 at 9:23 AM

    I don’t think there can be any correlation between income and gambling. They are two entities independent of each other. You can make as much money as you can. Gambling is no good, period. You don’t have to have big income to gamble. Many lower income families gamble as well. But it can easily be considered an evil especially because it’s highly addictive.

    1. J. Money May 1, 2013 at 11:47 AM

      Right. The addictive part and low income are serious problems for sure. You def. have to know yourself well AND have the *extra* money available to sit down and play. At least in the perfect world.

  8. John S @ Frugal Rules May 1, 2013 at 9:23 AM

    I say just look at it as some sort of entertainment and budget for it…and do not take more than you can afford. When we go to Vegas it’s not really for the gambling, but we will take a small amount to gamble with just for fun. If we make a little off of it then great and if we don’t then oh well.

  9. @debtblag May 1, 2013 at 9:40 AM

    I just can’t do it. Whether I’m making $100 a year or $100,000, there’s something I just can’t stomach about sitting down and playing a game where I know the expected outcome is me losing.

    1. @debtblag May 1, 2013 at 9:43 AM

      On the other hand, I do enjoy spending time in Las Vegas, enjoying all the inexpensive drinks, buffets, and lifestyle, subsidized by all the gamblers :)

      1. J. Money May 1, 2013 at 11:47 AM

        Haha, that’s something!

  10. Jacob Erickson May 1, 2013 at 9:57 AM

    I love gambling, it’s a source of entertainment for me. That being said, you definitely have to have a budget for it or it can get out of control. I normally allot myself about $50 a month and think of it as an entertainment expense if I lose it, but if I win then it’s just a bonus.

    I find it funny that so many people are completely against it. Do they realize any fantasy football league or march madness bracket is considered gambling as well? You just have to do it responsibly.

  11. J. Money May 1, 2013 at 11:48 AM

    Yep! Same with $1.00 lottery tickets – just on a much smaller scale :)

  12. too funny May 1, 2013 at 2:39 PM

    Calling NLH gambling might be a little misleading. NLH, while full of variance, isn’t like the house constantly having an edge, like Black Jack.

    I stick with 1/2 and 2/5 even though I could move up a lot. I’m just there for fun and to improve my game. Win some/lose some no big deal.

    I’m generally the most well off person at the low stakes tables. And, furthermore, many 1/2 NLH poker players look really poor! The game is fun when you can put pressure on someone else who might be risking their weekly paycheck. Not having to worry about losing the money can give you an edge in NLH; or worrying too much can set you up for failure. So, to highlight the title, if it feels like to much it probably is!

    J$ Hope to see you at MD Live when the poker room opens.

    1. J. Money May 3, 2013 at 2:27 PM

      You know, that might be a good place for us to finally meet :) But no way I’m sitting down w/ you at those tables! I’ll be like one of your poor people to be pushed around!

  13. Jacob @ iHeartBudgets May 1, 2013 at 4:07 PM

    I don’t gamble, but the key here is the word “BUDGET”. If you don’t have a set amount, that’s when it gets ugly. Having come from a household where my parents regularly gambled away the rent, I can tell you that when it goes bad, it goes REALLY BAD. Probably why I don’t gamble at all.

    I went to Vegas for a week, and the house officially won. I lost $1, and that’s my lifetime gambling record. :)

    And as a tax guy, I write off gambling losses for clients and NO ONE is ever up. NO ONE.

    1. J. Money May 3, 2013 at 2:28 PM

      You can write of gambling losses??? How does that work? You should be able to write off ANYTHING then in that case, haha… #stumped

  14. Mike@WeOnlyDoThisOnce May 2, 2013 at 12:22 AM

    Depends what type of person you are, as you point out. Know your limits and what works for you… the rest is highly variable.

  15. Kevin Watts @Graduatingfromdebt May 2, 2013 at 10:00 PM

    I mostly agree with what you said here. If you have a high risk tolerance and you set aside a certain amount for entertainment purposes then it shouldn’t be an issue. However, I know a lots of people who say they are going to one thing and then get on a losing streak and can’t stop it! I think it mostly depends on your personality.

    1. J. Money May 3, 2013 at 2:29 PM

      I tend to be one of “those people” too when i go on a losing streak, it sucks… granted, I’m only playing with $20 or $50 max at any given point in time, but still – it eats away at you! Yet another reason I can’t go pro ever – it consumes me too much! (Though not like I don’t let things like blogging do that now, haha…. at least it doesn’t cost me money :))

  16. SavvyFinancialLatina May 3, 2013 at 11:47 AM

    I’m not a gambler. I hate losing money! That being said, I would start a piggy bank for gambling. Any lose change can go to the casino. I know this is what my grandma does. She loves the slot machines even though she’s lost most of her vision due to cataracts!

  17. Dustin March 10, 2018 at 8:44 AM

    The magic number for me is 3%.

    I apply this to my last 12 months net income earnings.

    So for example, 3 years ago I net about 100K and so I would gamble annually, $3K until it’s gone. Any profits or deficits do not carry over to the next year. So If I win $2K (come home with $5k) and my earnings were the same next year, I still only gamble $3K.

    This was easy when I knew that my only gambling trip was to Las Vegas one time per year. I live in South Florida and I’m 1 hour away from Hard Rock so my Trips are sporadic and the wife and I usually go down on both Birthdays and a few of the couple holidays (valentine, new years) so im averaging about 4 trips per year.

    It’s also a bit different b/c my income last two years I’ve have been fortune and have net ~400K after taxes.

    So this would be ~$12K/year divided by 4 expected trips is ~$4k/trip. All of these trips have been with my wife so it’s basically our collective budget.

    Again, I won’t roll over any left over cash or profits from trip to trip so it basically implies that the most I’m willing to lose is 3% but unless we were extremely unlucky/careless, it’s going to be less.

    This is point I wanted to make the most. First several years my Wife always has a hard time gambling because she sees it as cash that we might need and explaining and making her grasp the budget to relative income just never works, despite trying to tell her to pretend it’s just monopoly money and to have fun with it.

    In my head, I know where we’re at but what made it easier for her and I is to have a monthly budget where our income automatically goes towards all the important stuff:

    – Set aside emergency fund (6 months)
    – Max out 401k / SEP IRA annually on monthly basis
    – I put 5% of earnings into Stock Market
    – Auto set aside $ for kids college funds
    – Auto set aside $ for Health Savings Account
    – Auto set aside $ for expected annual taxes
    – Auto set to put aside in checking account budget for monthly expenses

    Once I put all of these things in place she’s willing to spin away knowing that the most important security items in life are taken care of. It was easy for my to gamble before but this helps me out a lot too when I have the urge to have a $100/hand blackjack session or put $500 on black/red or do some $10/spin on the slot machine.

    Mainly, there’s a difference between having the money for the important stuff and taking action to put it away through a budget.

    Do I have a gambling problem and am I addicted to gambling? …YES, but you’ll always have more fun losing it if you come up with a budget that works and you stick by.

    1. J. Money March 12, 2018 at 10:11 AM

      Okay, I think you’re the most diligent gambler I now know, haha…. Love it! And it’s obviously working for you work/life/balance-wise since you’re thriving in all the other areas. Kinda like a hobby for you vs obsession, yeah? (At least while you still have a day job :))

      Thanks for stopping by and sharing today… Fun going back 5 years for me too when I published this :)

  18. S.M December 12, 2018 at 1:38 AM

    Ahhhh, at the casino currently and googled max percent of gambling you should spend after my few hours of shenanigans. Here’s the psyche from a (possible degenerate) gambler:

    – checked at 2pm oh I see a free hotel room & nothing else to do today
    – told myself before I came in, cut off at win $300 lose $1k MAX
    – won $300ish within 20 minutes well hell I drove 60 miles let’s keep it rolling…. 2 hours later im down $2000
    – I did hit platinum status on the tier card (yay more free hotel rooms!! damn $15 resort fees though!!!!!)
    – got $20 food come late night chicken tenders for free yay!

    I’m a little more fortunate as I’m self employed so i have the possibility of making a lot of money if I work hard…last year did $40k. this year I’m around $200k I think. (Taxes are going to take like $60k though!!!!) The $2k loss hurt tonight obv since I’m googling and its funny I still have a bank roll or $5k with me, probably will go spend $1k more max in morning at high limit slots and see what happens…
    money comes and goes. And I’m single. No kids. Nothing else to spend it on besides strippers drugs and alcohol. Fortunately I’ve managed those 3 things pretty damn good considering the fortunate position I’ve been in since 17 years old. No trust fund. Work hard play hard. I brought bank roll going to mall and was doing $1k a Xmas present for each family member (only 3 people are in my life and don’t have any fiends really)
    Cliff notes: Don’t gamble but if you do, don’t kill your self if you lose because you will probably lose!!! And if youre in a relationship or have a family, just don’t gamble. Not worth it at all. I wouldn’t lose or give up love for gambling!!! You are already ahead and won!!! Don’t gamble!!!!!!! Unless you can truly control yourself but still don’t gamble!!!!! Just give the money to the wifey or hubby and watch. Honestly I’d have more fun watching a girlfriend or wife play than myself playing.

    I’m drunk it’s 2am and I’ll pop an adderall at 7am to ensure I make it through Wednesday, do my last minute gambling while it kicks in, and get back to real work.

    I almost like playing scratch offs better despite worse odds because at least that money goes to the states education fund and helping people. LOL

    Life Is Good! God is Great!

    Good luck everyone and remember be kind to all

    1. J. Money December 12, 2018 at 2:46 PM

      Well this was a fascinating read! Appreciate the honesty and rawness man, haha… I find myself not being able to stop either when you win FIRST THING like that :) Not that I play much anymore since “settling down” and having kids/etc… (no more time!)

      Really hope you can find some good people to share your life with too… You sound super interesting and obviously very smart working for yourself like that. Has gambling gotten in the way of it for you, or do you find yourself just killing time and think you’d be good w/ stopping when/if the day comes to settle down with someone?

      Wishing you all the luck in the world either way… I’m glad you’re googling this stuff and keeping it real with yourself! Keep going, man!

  19. S.M December 12, 2018 at 1:50 AM

    I just posted a drunk paragraph about my gambling tonight. Making me think about just quitting despite I kind of have a motto we’re all going to die one day so just send it and live your best life…but then I stumble upon this Dave Ramsey page. If you are trying to figure out a budget of yearly income… maybe it should be 0% maybe good ol Dave is right . He says quote:

    I don’t think it’s a moral problem. I just don’t understand it. That’s how I feel about it. I do not get a thrill out of losing money that I’ve worked for. That’s not entertaining to me. And you’re not going to win. The house wins. That’s how they build those palaces called casinos. It’s an industry. It’s called the gambling industry. Some of those companies are publicly traded, and the profits they make off of your stupidity giving them money and calling that entertainment drives their stock price.

    I don’t grasp how it is entertainment to lose money. It’s not entertaining to me. My suspicion is always that when someone says, “Oh, I just do it for recreation,” that what you’re really honestly saying is you think you’re the exception and you’re actually going to win. Otherwise, there’d be no thrill to it. If you were just going to throw money down the toilet, you could just throw money down the toilet, literally. If that’s entertaining to you, lay, like, $100 bills in your toilet and flush. It’s kind of the same thing. Whooo! There it went. Watch it. It’s gone! Wheee! That was fun. Let’s do it again!

    It’s the same thing as pulling the one-armed bandit, isn’t it? The slot machine. Wheee! Bing, bing, bing! Took your money. Wheee! It’s gone. Wow, that was fun! I’m so entertained.

    I just don’t get it. I really don’t grasp it. And why do all the people sitting at the slot machines look like they’re people that can’t afford to lose money? They look like sad, broke people. Lonely people. They don’t look like people that are winners in life. Sorry, guys, if that’s you. You’re kind of pitiful-looking. Maybe you change when you sit down at the slot machine, but maybe you were a winner and when you walked in there, you got a different body language and suddenly your face aged and I saw stress in your eyes and hopelessness going across your countenance.

    I’m not entertained by this. It’s not a big moral thing to me. I just don’t grasp it. So no, I’m not going to be in the casino. I don’t even play blackjack, and that’s at least some kind of a somewhat of a control over some part of the game. But wheeee! We lost money! Oooh, that was fun! How is that fun?

    1. J. Money December 12, 2018 at 2:49 PM

      Haha yup – another guy who has no problem telling it like it is!

      Lots of truth in there for sure… (although I still find parts of it thrilling, within reason… That last part being the most important ;))).

      Thanks for forwarding this along though – haven’t read his thoughts on it before.


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