With Name, Image, and Likeness (NIL) deals, student-athletes now have the opportunity to earn money while still in school. However, without proper financial planning, NIL earnings can disappear quickly, leaving little for future expenses like college tuition, investments, and post-sports career opportunities.
As a parent, you play a crucial role in helping your child develop smart money management habits and create a budget that ensures financial stability. This guide will walk you through the essential steps for setting up an effective NIL budget, managing expenses, saving for taxes, and planning for the future.
1. Why Budgeting is Important for NIL Earnings
Many young athletes aren’t used to managing money, and NIL income can be unpredictable. Some deals may provide one-time payments, while others generate ongoing earnings. Without a budget, it’s easy for student-athletes to overspend and fail to plan for important expenses.
How a Budget Helps:
✔ Prevents overspending – Helps your child understand where their money is going.
✔ Ensures taxes are covered – Avoids unexpected tax bills at the end of the year.
✔ Encourages smart saving – Builds financial security for the future.
✔ Prepares for post-athletic careers – Supports financial stability after college.
💡 Tip: Teaching your child financial discipline early will set them up for long-term success, regardless of whether they go pro or pursue another career.
2. Step-by-Step Guide to Creating a Budget for NIL Income
The best way to manage NIL earnings is to break them down into specific categories. Below is a recommended budget breakdown that ensures your child’s money is used wisely.
Suggested NIL Budget Breakdown:
- 30% – Taxes (Federal, state, and self-employment taxes)
- 25% – Savings & Investments (Emergency fund, long-term savings, retirement)
- 20% – Living & Personal Expenses (Rent, food, transportation, phone, insurance)
- 15% – Business & Branding Expenses (Marketing, legal fees, website, social media management)
- 10% – Fun & Entertainment (Leisure activities, shopping, travel)
💡 Tip: Adjust percentages based on personal needs, but always prioritize taxes and savings before discretionary spending.
3. Managing Taxes on NIL Income
One of the biggest mistakes student-athletes make with NIL money is forgetting about taxes. Since NIL earnings are considered self-employment income, taxes are NOT automatically withheld.
How to Handle NIL Taxes:
✔ Set Aside 25-30% for Taxes – Keep this money in a separate tax account.
✔ Make Quarterly Estimated Payments – The IRS requires self-employed individuals to pay taxes every three months if earnings exceed a certain threshold.
✔ Track Income & Expenses – Save all 1099 forms, receipts, and contracts to ensure accurate tax reporting.
💡 Tip: Work with a tax professional to determine the correct amount to pay and identify possible deductions (e.g., business expenses, travel costs, agent fees).
4. Prioritizing Savings & Investments
Saving and investing a portion of NIL earnings ensures long-term financial security. Even if your child doesn’t go pro, NIL money can provide a head start on their financial future.
Where to Save & Invest NIL Earnings:
- High-Yield Savings Account – For short-term savings and emergency funds.
- Roth IRA (Retirement Savings) – Tax-free growth for long-term financial security.
- Brokerage Account – Investing in stocks, index funds, or ETFs for wealth-building.
- College Savings (529 Plan) – If NIL income is being used to pay for education.
💡 Tip: Match your child’s savings (e.g., if they save $500, you add $500) to encourage financial discipline.
5. Covering Living & Personal Expenses
Even though NIL earnings provide extra income, student-athletes still have daily expenses. Setting a clear budget for living costs ensures that essential needs are covered.
Typical Expenses for Student-Athletes:
🏠 Housing & Rent – If they live off-campus.
🍽️ Food & Groceries – Not all NIL earnings come with free meal plans.
🚗 Transportation – Gas, car payments, ride-sharing, or public transit.
📱 Phone & Internet – Essential for communication and business.
⚕️ Insurance – Health, renter’s, or car insurance.
💡 Tip: Have your child use a budgeting app (Mint, YNAB, or EveryDollar) to track expenses in real-time.
6. Managing Business & Branding Expenses
NIL income is not just about making money—it’s about building a personal brand that attracts more opportunities. Some NIL expenses, like marketing and website management, are considered business investments that help increase future earnings.
Possible NIL Business Expenses:
✔ Website & Social Media Management – Helps maintain an online presence.
✔ Photography & Video Production – High-quality images and highlight reels for marketing.
✔ Legal & Agent Fees – Ensures contracts are fair and legally sound.
✔ Travel Costs – Attending events, brand appearances, and sponsorship obligations.
💡 Tip: Keep records of all business-related expenses for tax deductions.
7. Allocating Money for Fun & Entertainment
Budgeting doesn’t mean your child can’t enjoy their earnings. A small portion of NIL income should go toward personal spending to maintain a balanced lifestyle.
Fun Expenses to Budget For:
🎟️ Concerts, movies, or events
🛍️ Clothing & shopping
✈️ Vacations or weekend trips
🍽️ Dining out with friends
💡 Tip: Encourage your child to limit impulse purchases and focus on value-based spending.
8. Avoiding Common NIL Money Mistakes
Many student-athletes make financial mistakes that hurt their long-term success. Teaching your child what to avoid is just as important as teaching them how to manage money.
Common Financial Mistakes & How to Avoid Them:
❌ Spending Everything Too Quickly → Stick to a budget and prioritize savings.
❌ Forgetting About Taxes → Set aside at least 25-30% of NIL earnings for taxes.
❌ Signing Bad NIL Contracts → Always review contracts with a lawyer or agent before signing.
❌ Failing to Track Income & Expenses → Use budgeting apps and keep financial records.
❌ Not Thinking About the Future → Invest early in stocks, retirement accounts, and education.
💡 Tip: Set monthly financial check-ins with your child to review their budget and spending habits.
Final Thoughts: Helping Your Student-Athlete Build a Smart NIL Budget
Budgeting is a critical skill that will benefit your child far beyond their athletic career. By setting up a structured budget, managing taxes, prioritizing savings, and planning for future expenses, your child will be able to maximize NIL earnings and set themselves up for financial success.
As a parent, your role is to provide guidance, accountability, and financial education. Teaching these principles now ensures your child makes smart money choices as they navigate NIL deals and beyond.
If you have questions about NIL financial planning, budgeting, or tax management, feel free to reach out to us at in**@**********************es.com. We’re here to help!
Ready to help your child make the most of their NIL earnings? Contact us today for personalized financial guidance and resources!
