Helping Your Student-Athlete Navigate NIL Money Wisely
The introduction of Name, Image, and Likeness (NIL) opportunities has created an exciting new financial landscape for student-athletes. For the first time, athletes can earn money through sponsorships, endorsements, social media deals, and other business ventures while still in school. While NIL presents amazing financial opportunities, it also comes with responsibilities that many young athletes—and their parents—may not be prepared for.
At Parents of Student-Athletes, we believe that financial literacy is just as important as athletic performance. Teaching your child how to manage their money, make smart financial decisions, and plan for the future will set them up for long-term success beyond sports.
Why Financial Literacy Matters for Student-Athletes
Many student-athletes go from having little to no income to suddenly managing thousands—or even hundreds of thousands—of dollars through NIL deals. Without proper financial education, this money can disappear quickly due to poor spending habits, tax mistakes, or unwise investments.
By understanding budgeting, taxes, saving, investing, and protecting their earnings, student-athletes can maximize their NIL opportunities while securing their financial future.
Key Financial Lessons for NIL-Earning Student-Athletes
1. Budgeting & Smart Money Management
- Teach your athlete how to track their income and expenses so they don’t overspend.
- Encourage setting aside money for taxes, savings, and future goals before spending on luxuries.
- Help them create a monthly budget that includes essentials, personal spending, and long-term savings.
2. Understanding Taxes & NIL Income
- NIL income is considered self-employment income, meaning taxes are not automatically deducted—student-athletes must set aside money to pay taxes quarterly.
- Help your child work with a CPA or tax professional to navigate tax filing, deductions, and compliance.
- Failing to pay taxes on NIL earnings can result in penalties, debt, and financial stress—planning ahead is key!
3. Protecting Their Money & Avoiding Scams
- Warn against financial predators—agents, financial advisors, or “business managers” who promise big opportunities but may not have the athlete’s best interests in mind.
- Teach the importance of contracts—before signing any NIL deal, have an attorney review the terms to protect their financial and legal rights.
- Be cautious with investments—student-athletes should avoid risky or “too good to be true” investment opportunities.
4. Building Long-Term Wealth Through Saving & Investing
- Encourage opening a savings account or high-yield savings account to build an emergency fund.
- Introduce retirement savings options, such as a Roth IRA, to help their money grow tax-free over time.
- Explain the power of compound interest and why saving early can set them up for life after sports.
5. Setting Up the Right Business Structure
- Many student-athletes benefit from forming an LLC (Limited Liability Company) to manage their NIL income, separate personal and business finances, and potentially reduce tax liability.
- A properly structured NIL business allows athletes to deduct legitimate expenses related to their endorsements and branding efforts.
- Consulting with a financial advisor or business attorney can help ensure everything is set up correctly.
How Parents Can Help
As a parent, you play a crucial role in guiding your student-athlete through financial decisions. Here’s how you can support them:
✔️ Start the conversation early about financial responsibility.
✔️ Encourage professional guidance from accountants, attorneys, and financial advisors.
✔️ Promote smart spending habits while also allowing them to make their own financial decisions.
✔️ Teach them to think long-term—NIL income may not last forever, so planning for the future is essential.
Final Thoughts
NIL deals are an incredible opportunity, but without financial literacy, many student-athletes risk losing more than they gain. By equipping your child with the right financial tools, they can make the most of their NIL income while securing their future beyond sports.
At Parents of Student-Athletes, we’re here to help you navigate this journey. If you have questions or need additional resources, reach out to us at in**@**********************es.com.