Written by Pat Brown, MBA
As Name, Image, and Likeness (NIL) deals continue to transform the college sports landscape, many student-athletes are finding themselves with new sources of income, sometimes significant ones, from brand partnerships, sponsorships, and endorsements. While NIL offers lucrative opportunities during their athletic careers, it’s important for both parents and athletes to understand the long-term implications of this new income and how to best prepare for life after sports.
Preparing your child for a post-sports life requires more than just saving money—it involves developing good financial habits, investing wisely, and thinking about the future beyond their athletic career. Here’s how you can guide your child in preparing for the next phase of life with their NIL income:
1. Start with Financial Education
One of the most important steps in preparing your child for life after sports is teaching them about financial literacy. If they have the opportunity to earn substantial NIL income, they need to understand how to manage that money responsibly. This includes:
- Budgeting: Help your child create a budget that accounts for both short-term and long-term needs. A budget will help them manage day-to-day expenses and save for their future goals.
- Saving: Encourage them to set aside a portion of their NIL earnings for savings and emergencies. Even if the income isn’t guaranteed long-term, having savings can provide security if income fluctuates.
- Understanding Taxes: NIL earnings are taxable, and many student-athletes may not initially realize the impact taxes will have on their earnings. Help your child understand how to calculate and set aside money for taxes.
By teaching financial literacy early on, you’re giving your child the tools they need to manage their finances wisely, both now and in the future.
2. Establish Long-Term Financial Goals
NIL deals are a great way for student-athletes to gain financial independence during their college years, but it’s essential to think about how this income will fit into their long-term financial goals. Parents should help their child establish these goals and break them down into manageable steps. Some common long-term financial goals might include:
- College Expenses: If NIL income can help with tuition, living expenses, or other costs associated with their education, it should be allocated accordingly.
- Investing for the Future: Once they’ve developed a savings habit, the next step is investing. Introduce them to investment options, like stocks, mutual funds, or retirement accounts, to help grow their wealth over time.
- Retirement: While it may seem far off, investing early in a retirement account (like a Roth IRA) will help ensure your child has a comfortable financial future beyond their sports career.
Starting to think about the future is critical for athletes, especially if their career is short-lived or they eventually transition out of sports.
3. Encourage the Development of Transferable Skills
Athletic careers can be brief, and many student-athletes don’t know what they want to do after they hang up their jerseys. It’s important to use the NIL earnings as an opportunity to develop skills and experiences that will help them transition into their next career phase. Here are a few ways to prepare:
- Building a Personal Brand: NIL deals require athletes to market themselves, and this can be a valuable skill even after they leave sports. Help your child develop a personal brand that aligns with their values and interests, which can translate into future career opportunities, business ventures, or even endorsements after sports.
- Networking: NIL deals provide athletes with access to brands, businesses, and professionals. Encourage your child to network and build relationships that may benefit them in their future career. These connections could lead to post-sports business ventures, job offers, or collaborations.
- Pursuing Other Interests: If your child has an interest in something outside of sports—whether it’s entrepreneurship, a particular profession, or academics—encourage them to use their NIL income to pursue that passion. Consider taking classes, attending conferences, or starting a side project that could evolve into a post-sports career.
Helping your child develop these transferable skills will give them the confidence and experience to thrive after their athletic career ends.
4. Create a Plan for Financial Independence
While NIL deals offer immediate financial rewards, athletes need to understand that their earning potential may not last forever. Some athletes may go pro, while others may see their NIL opportunities fade after college. Preparing your child for financial independence means making decisions today that will set them up for long-term stability.
- Diversify Income Streams: Encourage your child to look at their NIL income as just one part of their financial portfolio. It’s important to consider other potential income streams, such as side businesses, investments, or future career opportunities. Having multiple sources of income can provide financial security even when one stream (like NIL) may dwindle.
- Financial Advisors and Planning: Working with a financial advisor is essential for managing larger sums of money. A professional can help with everything from tax planning to retirement strategies and investment options. Encourage your child to work with someone who specializes in athletes’ financial needs and can help them plan for life beyond sports.
Having a financial plan that includes long-term investments and a diversified income strategy will ensure that your child is prepared for the future, even if their athletic career ends sooner than expected.
5. Plan for the Transition Out of Sports
When it comes time for your child to transition from sports to another career or phase of life, having a well-thought-out plan is key. Many athletes struggle with this transition, so parents should be proactive in helping their children mentally and emotionally prepare.
- Education and Career Planning: If your child plans to pursue a career after sports, whether it’s in business, entertainment, or a different field, it’s important to start planning early. Use NIL income to pay for professional development, such as further education, certifications, or internships that will prepare them for a smooth career transition.
- Mental Health and Well-being: Transitioning out of sports can be a difficult emotional experience for some athletes, as their identity is often tied to their athletic achievements. Encourage your child to seek counseling or mental health resources to navigate the emotional aspects of this change.
Preparing for life after sports involves both financial and emotional preparation. Helping your child manage this transition with a solid plan will ensure they remain confident and secure in their post-athletic future.
6. Leave a Legacy
Finally, NIL income offers a unique opportunity to set an example for others. Encouraging your child to think about how they want to use their earnings to make a positive impact can give their financial success a greater purpose. This might involve:
- Giving Back: Your child can use part of their NIL earnings to contribute to charitable causes or community projects that align with their values. Giving back not only helps others but also strengthens their personal brand.
- Building a Lasting Impact: Consider how your child can use their NIL income to create lasting change or support causes that matter to them. This might include funding scholarships, starting a nonprofit, or investing in ventures that positively impact society.
By thinking beyond their own financial needs, your child can use their NIL income to leave a lasting legacy and positively impact the lives of others.
Final Thoughts
NIL deals offer incredible opportunities for student-athletes, but they also come with the responsibility of preparing for life after sports. As a parent, it’s your role to help your child manage their NIL income wisely, invest in their future, and develop the skills and mindset necessary for success beyond athletics. By starting early with financial education, goal-setting, and career planning, you can ensure your child has a strong foundation for both their current and post-sports life.
- Pat Brown, MBA
