Gambling is fun for millions upon millions of people. I have to admit that I love winning at the blackjack table, although I don’t always do that. My record on gambling is pretty bad so you may think my advice is biased by my experience. I grant you that if I were making hundreds of thousands of dollars a year by gambling I would probably think more highly of it, but frankly that could be said about any means of income. If you lose $3 million a year building and selling houses, should you really think of it as a good business investment?
When it comes to managing your household budget you should set aside money for entertainment. But if you are serious about making a fortune then you have to control your urges to spend money on entertainment. Think of ways to enjoy life without spending money, such as:
- Watching television
- Throwing dinner parties with friends
- Going for long walks in the woods
- Watching local sporting events
Substituting a less expensive form of entertainment for a more expensive form makes your money last longer but you still have fun. You don’t need to prove your wealth to anyone. In fact, recent history is filled with modest millionaires who lived quiet lives in middle class neighborhoods.
Roman Blum was a holocaust survivor who was never able to have children with his wife, also a holocaust survivor. They slowly built up a fortune in real estate but did not flaunt their wealth.
Edwin “Bud” Skalla was an Iowa farmer who gradually acquired over 1200 acres of land before he died, bequeathing it to local Catholic churches (most of the land was sold off). Almost no one in his community knew he was a millionaire until he died and his will was read.
Ronald Read left behind several million dollars to a local hospital and library. He built up his wealth while working as a janitor, investing a little bit of money every month in stocks.
These and other “quiet millionaires” did not squander their earnings and wealth at the casinos or on fancy trips around the world. Instead they chose to continue living modest lifestyles and they were happy with their lives, or as happy as they could be. They had no dependencies forcing them to make bad decisions.
But gambling itself is not necessarily a bad thing. In fact, it’s a gamble to invest your money in the stock market. It’s just that your chances of making money in stocks are better than in making money from gambling because random chance plays a much smaller role in how the business of economics works.
As a budget maker I only have to decide for myself how much money I will spend on entertainment every month. If I choose to set aside that money and save it up for a trip to a casino, then I’m still honoring my commitment to myself to build my wealth. If you put back $25 every month and visit a casino only once a year, you can enjoy a $300 spree at the tables or on the slot machines. But you could lose all that money very quickly. Be sure you get as much time out of your $300 as you possibly can.
But we don’t have to gamble at casinos. Now we can play lottery games every day. Lotteries are the worst ways to gamble because the odds of winning are so bad. You have a far better chance of making money off slot machines than you do from playing lotteries (and that includes Keno). I’m not saying you should play slot machines; I’m just saying that playing lotteries is almost as good as throwing your money away.
If you spend $5 on lottery tickets every week you will spend $260 a year. That’s not so bad but the return on your entertainment investment is not very good. You spend most of your time buying the tickets. The numbers are drawn very quickly and checking them doesn’t take very long.
We can also gamble online. This is not legal for most Americans but in some states you can gamble at local casinos’ Websites. The games are all electronic simulations or video interactions with dealers. This kind of gambling may chew up the clock but unless you are very good (or very lucky) you will spend a lot more money than $5 a week gambling online.
And then we can gamble at home with our friends. Millions of people have weekly games, maybe poker, maybe something else. These games may involve only a few hundred dollars between players but the losses can still add up. If you win money gambling then you can build a stake from which to gamble, but sooner or later you will lose that stake.
A modest entertainment budget for the month might run to $200, assuming you allow yourself about $50 per week. That almost covers a cheap night out for two (including movie tickets or tickets at a local play). A somewhat more generous budget allows you $75 per week.
One way to increase your entertainment value is to set back some of that entertainment money for future splurges. If you are budgeting $300 a month for entertainment but manage to spend only $150 a month, you could potentially save $1800 every year. That is money you could invest or, because you have already allocated it for entertainment, it is money you can spend on vacation. Even paying $200 a night for a nice hotel room, you can easily set back $1000 for gambling.
But how much time should you spend enjoying that $1000? Acting like a high roller is not a good strategy. If you want to stretch your money out over the weekend think about doing things in addition to gambling, such as taking in shows, enjoying fine restaurants, etc.
While it’s possible you might win back some of your money, you should assume you will lose it all, but not try to lose it. Don’t just throw away $500 because you have to leave in 2 hours. If you return home with a few hundred dollars in your pocket that is money you can invest for the future.
Ultimately the more money you spend on entertainment regardless of what type of entertainment it is the less money you are using to pay down your debts and invest in the future. You need to find a quality of life that allows you to feel fulfilled and relaxed so that you don’t resent the savings you set aside for emergencies and the future.
Your best bet of being happy with your life is to develop hobbies that don’t require a lot of money. If you live close to national parks and enjoy the outdoors then you have many good options for finding relaxing activities without spending a lot of money. Local parks where you can walk your dogs, take your children to play, and enjoy occasional festivals (even free concerts in some cities) are also great ways to save money.
Be fair to yourself when you budget for entertainment, but when it comes time to enjoy the moment remember that sometimes a better choice will cost you less than you had planned to spend. Keep an eye out for great entertainment opportunities that are worth changing your plans for, because if they save you money and enrich your life, you win in more than one way. And that is a gamble worth taking every time.