You’ve probably already heard poker pros and experts talk about how being a great player often comes down to proper money management.  But to most people, this simply means making money on the tables and avoiding the temptation to spend it gambling in the casino or partying with friends.

However, there is a much deeper meaning to money management when it comes to calculating tournament expectations.  And being able to calculate your tourney expectation is very important since it helps you determine how well you’re managing your tournament bankroll.  It’s also very useful when trying to figure out if you are playing at the right limits.

The best place to start when figuring out your tournament expectation is with the average cash.  For instance, let’s say you cashed for $2,000 over the course of the last month in 60 tournaments.  Taking $2,000/60 you would come up with an average cash of $33.33.

Of course this only shows you how much you made in tournaments where you actually cashed.  So things need to be taken a step further by figuring out how often you cash in the tournaments you play.  To find out how many times you finished in the money, simply take the number of times you cashed divided by the number of tourneys played.  Assuming you played in 300 tournaments to get those 60 cashes, the percentage of times you were in the money would be .200 (60/300) which is really good.

With this percentage you now know that you’d cash in one out of every 5 tournaments.  So the next step is to figure how much you’re spending to get each tournament cash.  To calculate these total costs, multiply the number of tournaments it takes you to cash by rake and buy-in.  Assuming you mainly play $3 + $0.30 Sit and Go’s, the formula would be 5($3 + $0.30).  After doing the math you’ll find that your average cost would be $16.5 to get each cash.

The final step to calculating tournament expectation is subtracting your average cost from the average cash and then dividing it by the number of tournaments it takes you to cash.  In this example, the formula would be ($33.33 – 16.5)5 and the answer would be $3.36.

So, after doing more math than most people care to do, your tournament expectation would be a $3.36 profit for every tourney you play.  And anybody can find out their tournament expectation as long as they keep track of their buy-ins, number of tourneys played, number of cashes, and amount of money made.