As a parent of a student-athlete, you play a crucial role in shaping your child’s financial future. With the rise of Name, Image, and Likeness (NIL) earnings, many young athletes are making money at an early age—but without proper financial habits, that money can disappear quickly.
Teaching financial responsibility now will set your child up for long-term success, whether they pursue a professional athletic career or transition into another field. Here’s how you can help your child establish strong financial habits and build a secure future.
1. Start with Financial Education
Most student-athletes don’t receive formal financial education in school. As a parent, you can bridge this gap by teaching money basics early.
Key Financial Concepts to Teach Your Child:
📌 Budgeting – Managing income vs. expenses.
📌 Saving – Setting aside money for short-term and long-term needs.
📌 Investing – Growing wealth through smart investments.
📌 Taxes – Understanding tax obligations on NIL income.
📌 Smart Spending – Making thoughtful purchases and avoiding unnecessary debt.
💡 Tip: Use resources like Financial Literacy for Student-Athletes and Financial Literacy for NIL to help your child learn financial skills.
2. Teach Budgeting with the 50/30/20 Rule
A budget helps your child track where their NIL money is going. One of the easiest ways to manage money is using the 50/30/20 budgeting rule.
How to Divide NIL Earnings:
✅ 50% Needs – Rent, food, transportation, insurance, taxes.
✅ 30% Wants – Entertainment, shopping, travel, hobbies.
✅ 20% Savings & Investments – Emergency fund, Roth IRA, brokerage account.
💡 Tip: Encourage your child to use budgeting apps like Mint, YNAB, or EveryDollar to track their spending and savings.
3. Encourage Saving Early
Saving money is one of the most important financial habits your child can develop. The earlier they start saving, the more they benefit from compound interest.
Best Places to Save NIL Income:
🏦 High-Yield Savings Account – For emergency funds.
📈 Roth IRA (Retirement Savings) – Offers tax-free growth for long-term security.
📊 Brokerage Account – Allows investing in stocks, ETFs, and index funds.
🎓 529 College Savings Plan – Helps pay for future education expenses.
💡 Tip: Have your child automate savings by setting up a direct deposit into their savings or investment accounts.
4. Teach the Importance of Paying Taxes
One of the biggest mistakes young athletes make with NIL money is forgetting about taxes. Since NIL income is self-employment income, taxes are NOT automatically withheld, meaning athletes must set aside money and pay quarterly estimated taxes.
How to Handle NIL Taxes:
✔ Set Aside 25-30% for Taxes – Keep this money in a separate tax account.
✔ Make Quarterly Payments – The IRS requires self-employed individuals to pay taxes every three months to avoid penalties.
✔ Track All Income & Expenses – Keep records of 1099 forms, contracts, and receipts for tax deductions.
💡 Tip: Work with a CPA or tax professional to ensure tax compliance and maximize deductions.
5. Help Them Open the Right Bank Accounts
Having the right financial accounts helps your child manage, save, and invest their money efficiently.
Suggested Accounts:
🏦 Checking Account – For daily expenses and NIL deposits.
💰 High-Yield Savings Account – For emergency funds and short-term savings.
📈 Investment Accounts (Roth IRA, Brokerage Account) – To grow NIL earnings for the future.
💸 Tax Savings Account – To set aside a portion of earnings for taxes.
💡 Tip: Look for student-friendly banking options with low fees and good interest rates to maximize their savings.
6. Teach Smart Spending Habits
Earning NIL income is exciting, but it can also lead to reckless spending. Teaching smart spending habits will help your child avoid financial mistakes.
How to Encourage Smart Spending:
🛑 Avoid Lifestyle Inflation – Just because they earn more doesn’t mean they should spend more.
📊 Track Expenses – Use budgeting apps to monitor spending.
💡 Ask “Is This a Need or a Want?” – Before big purchases, encourage them to think critically.
⏳ Use the 24-Hour Rule – For non-essential purchases, wait 24 hours before buying to avoid impulse spending.
💡 Tip: Teach your child to create a monthly spending cap for non-essentials while ensuring savings remain the priority.
7. Help Your Child Build Wealth Through Investing
Saving alone won’t make your child wealthy—they need to invest to make their money grow. Teaching them how to invest early will set them up for financial success.
Where to Invest NIL Earnings:
📈 Roth IRA – Perfect for tax-free retirement savings.
📊 Index Funds & ETFs – Low-risk, long-term investments.
🏡 Real Estate – Buy property for rental income and wealth-building.
🚀 Business Ventures – Use NIL money to start a brand or side business.
💡 Tip: Introduce your child to a financial advisor to help them develop an investment plan tailored to their goals.
8. Set Monthly Financial Check-Ins
Helping your child develop financial discipline requires ongoing guidance. Regular financial check-ins can help them stay accountable and make informed decisions.
What to Review in a Monthly Check-In:
📌 Spending vs. Budget Goals – Are they sticking to their plan?
📌 Savings & Investment Growth – Are they meeting their targets?
📌 Upcoming Expenses – Do they need to adjust their budget?
📌 Tax Payments – Are they setting aside enough for taxes?
💡 Tip: Make these conversations positive—focus on progress, not mistakes!
9. Encourage Giving Back and Philanthropy
A well-rounded financial strategy includes giving back to the community, teammates, or causes that matter to your child.
Ways to Give Back:
🤝 Charitable Donations – Supporting local organizations or charities.
🎓 Scholarship Funds – Setting aside NIL earnings to help future student-athletes.
🏫 Mentorship Programs – Investing in the next generation through coaching or educational initiatives.
💡 Tip: Encourage your child to donate a small percentage of earnings to causes that align with their values.
Final Thoughts: Helping Your Child Establish Strong Financial Habits
Building good financial habits early can set your child up for a lifetime of financial success. By teaching them to budget, save, invest, and spend wisely, you’re giving them the tools they need to manage their NIL earnings responsibly and create long-term wealth.
As a parent, your role is to provide guidance, support, and education to ensure they make smart financial choices, whether they go pro or transition into another career.
If you have questions about NIL financial planning, investing, or saving strategies, reach out to in**@**********************es.com. We’re here to help!
