For student-athletes earning Name, Image, and Likeness (NIL) income, financial success isn’t just about how much they make—it’s about how much they keep and grow. The earlier they learn to save and invest, the better their chances of achieving long-term financial stability and wealth.
As a parent, you can play a crucial role in teaching smart money habits that will set your child up for financial success beyond sports. This guide will help you understand why saving early is important, how to teach your child good saving habits, and what strategies they can use to grow their NIL earnings wisely.
1. Why Saving Early is Crucial for Student-Athletes
Many student-athletes only focus on the present—spending their NIL earnings on clothing, travel, or entertainment. However, the real key to financial success is learning how to save and invest early.
Key Reasons to Start Saving Now:
✔ Compound Interest Works Over Time – The earlier your child saves, the more their money will grow.
✔ Provides Financial Security – Saving early creates an emergency fund for unexpected expenses.
✔ Reduces Financial Stress – Having money saved prevents financial struggles after college.
✔ Builds Wealth for the Future – Even if your child doesn’t go pro, they’ll have a financial cushion for post-athletic life.
💡 Tip: Teach your child that saving early is easier than playing catch-up later in life.
2. Teach the “Save First, Spend Later” Mindset
Most young athletes spend their NIL money first and save whatever is left over. Instead, teach them to save first and spend later by following a pay-yourself-first strategy.
How to Make Saving a Habit:
✅ Set a Savings Percentage – Encourage saving at least 25-30% of NIL income.
✅ Automate Savings – Have a portion of earnings go directly into a savings or investment account.
✅ Create Separate Savings Accounts – One for emergencies, one for short-term goals, and one for long-term investments.
✅ Track Progress – Use budgeting apps like Mint, YNAB, or EveryDollar to monitor savings growth.
💡 Tip: Lead by example! If your child sees you saving and investing, they’re more likely to follow.
3. Where Should Your Child Save NIL Earnings?
Not all savings accounts are created equal. Here’s how to help your student-athlete make the most of their savings:
Best Places to Save NIL Income:
🏦 High-Yield Savings Account – Perfect for emergency funds and short-term savings.
📈 Roth IRA (Retirement Savings) – Offers tax-free growth for long-term financial security.
📊 Brokerage Account – Allows investing in stocks, ETFs, and index funds for wealth-building.
🎓 529 College Savings Plan – If your child wants to use NIL earnings for education.
💡 Tip: Encourage opening a Roth IRA early—contributions grow tax-free and can be withdrawn in retirement!
4. Explain the Power of Compound Interest
Many young athletes don’t realize how much money they can grow by starting early. Teach them about compound interest—where money earns interest on both the original amount and previous interest earned.
Example: Saving Early vs. Waiting to Save
- Athlete A starts investing $200 per month at age 18.
- Athlete B starts investing $400 per month at age 28.
By age 50, Athlete A has more money, even though they invested less overall!
💡 Tip: Use an online compound interest calculator to show your child how their money can grow over time.
5. Set Financial Goals to Encourage Saving
Saving without a purpose can feel boring. Help your child set clear financial goals so they stay motivated.
Examples of Smart Financial Goals:
📌 Short-Term Goals (0-1 Year)
- Save for travel to competitions or showcases.
- Build a $3,000 emergency fund.
📌 Mid-Term Goals (1-5 Years)
- Save $10,000 for a car or first apartment.
- Invest $5,000 in a Roth IRA for retirement growth.
📌 Long-Term Goals (5+ Years)
- Save $50,000 for a home down payment.
- Invest $100,000+ for financial freedom.
💡 Tip: Write down financial goals and track progress every month to stay on course!
6. Teach Smart Spending Habits Alongside Saving
Saving is important, but so is responsible spending. Help your athlete find the right balance between enjoying NIL earnings and securing their future.
How to Spend Smartly:
❌ Avoid Lifestyle Inflation – Just because they’re earning more doesn’t mean they should spend more.
💳 Use the 24-Hour Rule – Wait 24 hours before making impulse purchases.
💰 Follow the 50/30/20 Budget Rule:
- 50% Needs (Rent, food, transportation, insurance).
- 30% Wants (Entertainment, travel, shopping).
- 20% Savings/Investments (Emergency fund, Roth IRA, brokerage account).
💡 Tip: Teach your child to ask: “Do I really need this?” before spending.
7. Help Your Child Build Wealth with Investments
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: Teach them that investing is for the long run—avoid “get rich quick” schemes!
8. Set Up Monthly Financial Check-Ins
To ensure your child stays on track, set up monthly money check-ins. This will help them stay accountable and make adjustments when needed.
What to Discuss in Monthly Check-Ins:
📌 Savings Progress – Are they reaching their financial goals?
📌 Spending Review – Did they stick to their budget?
📌 Investment Growth – Is their money working for them?
📌 Upcoming Expenses – Are they prepared for taxes or big purchases?
💡 Tip: Make these conversations positive—focus on progress, not mistakes!
Final Thoughts: Helping Your Athlete Build Wealth Early
Saving early is one of the most powerful financial habits your child can develop. By teaching them how to save first, spend wisely, and invest for the future, you’re giving them the tools to achieve financial independence—whether they go pro or not.
Encourage them to start small but be consistent, and remind them that wealth is built over time, not overnight.
If you have questions about NIL financial planning, investing, or saving strategies, reach out to in**@**********************es.com. We’re here to help!
