Is sports betting killing your financial independence plan?

Is sports betting killing your financial independence plan?

Thanks to some reader input of late, I wanted to write about this: is sports betting killing your financial independence plan?

Depending on your personality and easy access to credit, I think it will. 

Gambling 101

The most recent SuperBowl is now over – gambling will rage on.

Gambling is certainly nothing new.

Throughout history, people have found that applying a wager on a contest makes the outcome more interesting – you can be more engaged in the outcome and beyond that, well, you can make money too.

Making a small wager on a sports game is generally harmless for many people.

The problem with constant sports betting is it can change your behaviour over time. You create new habits. 

Like a snowball, what starts small can compound on you. The behavioural change can happen slowly and evolve.

Gambling addictions can impact your financial life, your personal life, your relationships and overall wellness. 

There doesn’t seem to be any benefits at all that come from constant gambling – so why bother??

Your brain on gambling

Research has demonstrated the act of gambling can have a powerful effect on the human mind.

“Researchers are now working to refine their understanding of the psychological principles that underlie the drive to gamble and the neurological underpinnings of what happens in the brains of gamblers who struggle to stop. Counter to simplistic assumptions about the role that the neurotransmitter dopamine plays in addictions (Nutt, D. J., et al., Nature Reviews Neuroscience, Vol. 16, No. 5, 2015), research is showing variations in the volume and activity of certain areas of the brain related to learning, stress management, and rewards processing that might contribute to problematic gambling.”

Source: https://www.apa.org/

Wagering can therefore create a compulsive dynamic – the cyclical juice of anticipation followed by winning excitment or sulking defeat can create patterns. Cycling through highs and lows and doing that enough over time can alter the way the brain operates, leading to a real need for help.

Help may need to arrive in the following one or more forms:

1. Being preoccupied with gambling – including thinking of ways to get money to gamble more.
2. Being restless or irritable when attempting to cut down or stop gambling.
3. Gambling when feeling distressed.
4. Losing a significant amount of money, a relationship, a job, or an opportunity because of gambling.
5. Lying to conceal the extent of your gambling.
6. Making repeated unsuccessful efforts to control, cut back or stop gambling.
7. Needing to gamble with increasing amounts of money to achieve the desired excitement.
8. Relying on others to provide money to relieve desperate financial situations caused by gambling.

Help to curb gambling can be found in these general ways:

1. Avoid any use of credit to gamble – any money to gamble comes from finances you can reasonably part ways with.
2. Don’t gamble while drinking alcohol.
3. Don’t play a game you don’t easily understand.
4. Limit the time you spend gambling.
5. Never lie about your wins or losses.

So, only bet the amount you can readily afford to lose.

Gambling Debt is More Common Than You Think

Sports gambling in particular has been on the rise.

I mean, it’s hard to watch any TV these days without sports betting ads in your constant face. For some, it’s annoying. For others, it’s a reminder to do something. 

According to Statistics Canada, I read something wild: around two-thirds of Canadians aged 15 or older have participated in some form of gambling, highlighting how widespread gambling activities have become.

I believe sports betting happens frequently these days for most since 1. credit is easy and cheap to come by combined with 2. other behavioural traits are being exploited more:

• Credit cards and quick loan schemes make it easy for folks to bet money with.
• Many gamblers may be hard-wired with existing issues that have been not dealt with: anxiety, depression, or attention deficit disorders (ADD) that can contribute to gambling behaviors.

If this sounds like you, or someone you know, here are other solutions:

1. Be aware and admit there might be a problem. 
2. Avoid online or physical locations involving gambling. 
3. Talk to someone else about your issue including seeking professional help. 

Is sports betting killing your financial independence plan?

It could be but not in this household.

Sure, I like to make the odd wager but I generally avoid gambling along with any sports bets. It’s not a habit for me more like the exception a few times per year. 

I don’t have sports betting apps installed on my phone and won’t do so.

I don’t buy weekly lottery tickets only on the exception of a few times per year.

I don’t visit nor enjoy casinos or other betting environments very much for the simple fact that: I don’t care to put myself in a position to gamble knowing I get little to no value in return.

So, at the end of the day, you need to consider what value your money provides.

Where you put your money is generally what you value. 

If some form of sports betting is part of your entertainment budget, fine. If a big portion of your spending has been diverted to gambling, well, you might want to question if that’s really what you value. Otherwise, a considerable amount of sports betting is probably killing your financial independence plan. 

Thanks to the reader for this inspiration and idea for the site. 

I welcome your thoughts.

Mark

Note/Image Source with thanks to Pavel Danilyuk.

Did you know? $25 gambles, per week, per month, for 25 years as part of “harmless fun” instead of investing this at 7% returns could turn into the following?

“At the end of the investment period, your TFSA will have an estimated value of $85,156.92. Your savings in a non-registered plan would be $59,683.74, meaning that by using a TFSA, your tax savings will be approximately $25,473.17.”

Source: https://www.getsmarteraboutmoney.ca/calculators/tfsa-calculator/