Money Talk

Managing your Money as a Student-Athlete with NIL Contracts

By Mary Archibald|Updated on April 22, 2024 (originally published on March 17, 2022)

On July 1, 2021, the NCAA approved a policy allowing student-athletes to earn money through name, image, and likeness contracts, otherwise known as NIL deals. While this new opportunity gives athletes the option to make money for all their hard work, many students find it challenging to manage these recent earnings. There is a lack of financial assistance as athletes are being thrown into these new roles without proper education on creating a budget.

Taxes and Management
First, it is necessary to note that even though this may not seem like a government or “official” income, you are still required to pay taxes on anything you make over $600. Students should know that while they may have been told they need to pay fees to the school for these deals, they also need to put money aside to pay taxes. These students should have conversations with wealth management professionals such as accountants. Also, keep in mind that tax laws depend on where your school is located. Make sure to do your research and reach out to professionals to learn how much money to set aside before doing anything else with the money.

Creating a Budget
After educating yourself on fees and taxes, your next step is to create a budget for yourself. While it is possible to have a full athletic scholarship from your university, nothing in life is free, and not everyone is lucky enough to have a full-ride. Maybe you are paying rent, buying groceries, or you have a love for shopping. Whatever it is, creating a budget for yourself is easy. One great tip is to record your necessary monthly expenses, including food, rent, and education. Next, you can record all those categories of purchases that are not necessary. This may include eating out, grabbing a cup of coffee, going to the movies with friends, etc. Then, set monthly spending goals/limits based on what you normally spend and what you make.

Set Goals and Invest in the Future
While this new opportunity may be exciting, it also comes with a lot of responsibility. It is crucial to set a goal to save, budget, and invest your money to create a safety blanket for yourself. The future can sometimes be unexpected. Even though you may feel invincible, a career-ending injury or family emergency may occur. Saving money early and often and educating yourself on financial management can only benefit your future endeavors.

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