The Athlete’s Guide to Managing NIL Money, Income, and Grants.
As a college student-athlete, managing your finances can be a challenging task. You are juggling your sports commitments, schoolwork, and personal life, all while trying to figure out how to manage your Pell Grant, NIL money, excess scholarship money, monthly stipends, cost of living, cost of attendance, and bonus money. But it doesn’t have to be overwhelming. Building good financial habits in college can set you up for a bright financial future.
According to the NCAA, “Financial literacy is one of the most important life skills student-athletes should learn while in college.” [0] With the recent changes to NIL (Name, Image, and Likeness) rules, it is more important than ever for college athletes to understand how to manage their money effectively. That’s why we have put together this guide to help college student-athletes navigate the complex world of finance.
In this guide, we will provide you with tips and advice on managing your finances effectively. We will cover the different types of financial aid available to student-athletes, including:
- Pell Grants
- Scholarships
- Stipends
We will also provide you with advice on managing your NIL money, building a budget, saving and investing, avoiding debt, and planning for the future.
By following the tips and advice in this guide, you can build successful financial habits that will benefit you long after your college days are over. So, let’s get you started on building a bright financial future!
Understanding the Financial Aid Package
As a college student-athlete, managing your finances can be a challenging task, especially with the recent changes to NIL (Name, Image, and Likeness) rules. But building good financial habits in college can set you up for a bright financial future.
To effectively manage your finances, it’s important to understand the different types of financial aid available to student-athletes, including:
- Pell Grants
- Scholarships
- Monthly stipends
- Other types of financial assistance
The NCAA sets a cost of attendance limit, which includes tuition and fees, room and board, books and supplies, transportation, and other expenses related to attending college. It’s crucial to know what types of aid you are receiving, how much they are worth, and how they can be used. [1]
In addition to traditional forms of financial aid, student-athletes can now earn NIL money. This additional income can benefit college athletes financially, but it’s important to manage it wisely. Tips for managing NIL money include creating a budget, saving and investing, and understanding the tax implications of NIL earnings. [2][3]
Creating a budget is a fundamental tool for managing your finances effectively. There are many resources available, such as NerdWallet’s budget calculator and Better Money Habits’ guide to creating a budget. Budgeting tips for college students include setting financial goals, avoiding debt, and saving money on everyday expenses. [4][5][6][7]
Managing excess financial aid money can also be a challenge for college student-athletes. Juno and Money Under 30 offer advice on what to do with extra financial aid money, including using it to pay off high-interest debt, building an emergency fund, or investing it for the future. [8][9]
By following the tips and advice in this guide, college student-athletes can build successful financial habits that will benefit them long after their college days are over. The NCAA provides resources for financial literacy, and Business Insider and CNBC offer advice specifically for college athletes managing their finances. [1][10][11][12][13]
By understanding the different types of financial aid available, managing NIL money, creating a budget, and using financial resources effectively, college student-athletes can build a bright financial future.
Managing NIL Money
- The recent change in NCAA NIL rules has allowed college student-athletes to earn income from their Name, Image, and Likeness.
- However, managing NIL money can be challenging, especially for college student-athletes who are new to managing their finances.
- It’s essential to develop effective financial management strategies to make the most out of NIL earnings and avoid any financial pitfalls.
One critical step in managing NIL money is creating a budget.
- A budget can help you plan how to use your NIL money wisely and ensure that you have enough money to cover your expenses.
- Tools like the NerdWallet budget calculator and Better Money Habits’ guide to creating a budget can help you get started.
- It’s also important to understand the tax implications of NIL earnings.
- Student-athletes who earn NIL money may need to pay self-employment taxes on their earnings.
- Understanding the tax implications of your earnings can help you avoid any unexpected financial surprises.
Another way to manage NIL money is to invest it for the future.
- Juno and Money Under 30 offer advice on what to do with excess financial aid money, including using it to invest in the stock market or a retirement account.
According to Business Insider, college athletes who have already earned NIL money offer advice for managing their finances.
- This includes creating a budget, saving and investing, and avoiding high-interest debt.
- It’s also essential to seek financial advice from professionals to develop effective financial management strategies.
- The NCAA offers resources for financial literacy, and NerdWallet provides financial tips specifically for college student-athletes.
By developing effective financial management strategies, student-athletes can make the most of their NIL earnings and build a bright financial future.
Building a Budget
Creating a budget is a fundamental step towards effective financial management, especially for college student-athletes who are managing various sources of income, including NIL money, scholarship money, monthly stipends, and bonus money.
A budget can help student-athletes prioritize their spending, manage their expenses, and save for future goals. To create a budget, it’s important to track your income and expenses. Dreamfield recommends using a spreadsheet or financial management app to keep track of your finances.
Additionally, 2ADays suggests setting a weekly or monthly budget for discretionary expenses like dining out, entertainment, or shopping.
Budgeting tips from BestColleges.com and Federal Student Aid recommend prioritizing essential expenses like rent, utilities, and groceries before discretionary spending. NerdWallet’s budget calculator and Better Money Habits guide to creating a budget offer step-by-step guidance on creating a budget, tracking expenses, and saving money.
Managing NIL money can be particularly challenging, as student-athletes may receive varying amounts of income from NIL endorsement deals. Business Insider reports that some student-athletes may receive thousands of dollars per month, while others may only receive a few hundred dollars. It’s important to account for these fluctuations when creating a budget and to plan accordingly.
College athletes who have already managed their finances successfully suggest prioritizing saving and investing in addition to creating a budget. CNBC’s guide to managing NIL money recommends opening a high-yield savings account, investing in stocks or cryptocurrency, or starting a side business.
By creating a budget and adhering to it, college student-athletes can manage their finances effectively, make the most of their income, and build a solid financial future. Seeking advice from financial professionals and utilizing online resources like those provided by NerdWallet and Federal Student Aid can provide valuable guidance in developing and maintaining a budget.
Saving and Investing while Avoiding Debt
Saving and investing are crucial components of building a strong financial future for college student-athletes, but it can be challenging to navigate while avoiding debt.
- It is essential to establish good saving habits and to create a plan that includes setting financial goals and prioritizing spending. One important tip is to limit credit card usage and avoid high-interest debt. Instead, focus on saving and investing in low-risk options like savings accounts or mutual funds.
- Creating a budget is a key step in managing finances, and it is essential to understand the difference between needs and wants when making financial decisions. Student-athletes should use budget calculators like NerdWallet’s to determine their income and expenses and to identify areas where they can save money. Better Money Habits also offers resources on how to create a budget and manage money effectively.
- To avoid accumulating debt, it is essential to live within one’s means and prioritize saving for the future. This can be achieved through setting up automatic savings contributions and investing in low-risk options like mutual funds. BestColleges.com suggests using cash or a debit card for purchases to limit the possibility of overspending. Federal Student Aid offers budgeting tips for students, including monitoring spending and using financial aid to cover essential expenses like tuition and textbooks.
Here are five best practices for saving excess funds from NIL, grants, scholarships, etc., to build real wealth through saving and investing:
1. Prioritize high-interest debt: If you have any high-interest debt, like credit card debt, use your excess funds to pay it down as soon as possible. High-interest debt can accrue quickly and eat into your savings, so paying it off is a smart financial move.
2. Build an emergency fund: Set aside some of your excess funds in an emergency fund. This will provide a cushion for unexpected expenses, like medical bills or car repairs, so you don’t have to dip into your other savings or take out a loan.
3. Invest in a retirement account: Consider opening a retirement account, like an IRA or 401(k), and using some of your excess funds to make contributions. The earlier you start saving for retirement, the more time your money has to grow.
4. Save for future expenses: If you know you’ll have upcoming expenses, like tuition or a down payment on a house, save your excess funds for these future expenses. That way, you won’t have to take out loans or rely on credit cards to cover the costs.
5. Consult a financial advisor: Consider working with a financial advisor who can help you create a savings plan that’s tailored to your specific financial goals and needs.
With the advent of NIL (name, image, and likeness) laws, student-athletes can now earn money from endorsement deals. However, it is crucial to manage this newfound income effectively. Business Insider offers advice from college athletes on managing NIL money, including setting up separate accounts and working with financial advisors. CNBC offers a guide to managing money under NIL laws, emphasizing the importance of budgeting and investing in long-term financial growth.
In summary, student-athletes should prioritize saving and investing while avoiding high-interest debt. Creating a budget, monitoring spending, and understanding the difference between needs and wants are all important steps in managing finances effectively. By investing in low-risk options and setting up automatic savings contributions, student-athletes can build a strong financial foundation for their future. Additionally, managing NIL money requires careful planning and working with financial advisors to maximize its potential benefits.
Conclusion
Managing finances as a college student-athlete can be a daunting task, but it doesn’t have to be.
By building good financial habits, student-athletes can set themselves up for a bright financial future. Understanding the different types of financial aid available, managing NIL money, creating a budget, and saving and investing while avoiding debt are all crucial steps in achieving financial success. Our team is here to help you navigate this complex financial world and ensure that you have an incredible college experience and a secure financial future.
Don’t hesitate to contact us to learn more and get started on your path to financial success today!
Citations
[0] NCAA. “Financial Literacy for Student-Athletes.” NCAA.org. https://www.ncaa.org/student-
athletes/future/financial literacy (accessed March 2, 2023).
[1] NCAA. “Financial Aid.” NCAA.org. https://www.ncaa.org/student-athletes/future/financial-
literacy/financial aid (accessed March 2, 2023).
[2] Dreamfield. “How to Manage Your NIL Money as a College Athlete.” Dreamfield.co.
https://www.dreamfield.co/resources/how-to-manage-your-nil-money-as-a-college-athlete
(accessed March 2, 2023).
[3] 2ADays. “Managing Your Money as a Student-Athlete with NIL Contracts.” 2adays.com.
https://www.2adays.com/blog/managing-your-money-as-a-student-athlete-with-nil-contracts/
(accessed March 2, 2023).
[4] NerdWallet. “NerdWallet Budget Calculator.” NerdWallet.com.
https://www.nerdwallet.com/article/finance/nerdwallet-budget-calculator (accessed March 2,
2023).
[5] Better Money Habits. “Creating a Budget.” BetterMoneyHabits.BankofAmerica.com.
https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/creating-a-budget (accessed
March 2, 2023).
[6] BestColleges.com. “Budgeting Tips for First-Year Students.” BestColleges.com.
https://www.bestcolleges.com/blog/budgeting-tips-first-year-students/ (accessed March 2,
2023).
[7] Federal Student Aid.” Federal Student Aid. “Budgeting Tips.” StudentAid.gov.
https://studentaid.gov/resources/prepare-for-college/students/budgeting/budgeting-tips
(accessed March 2, 2023).
[8] Juno. “What Happens to Leftover Financial Aid?” JoinJuno.com.
https://joinjuno.com/financial-literacy/financial-aid/what-happens-leftover-financial-aid (accessed
March 2, 2023).
[9] Money Under 30. “What to Do With Extra Financial Aid Money.” MoneyUnder30.com.
https://www.moneyunder30.com/what-to-do-with-extra-financial-aid-money (accessed March 2,
2023).
[10] Business Insider. “How College Athletes Are Getting Paid from NIL Endorsement Deals.”
BusinessInsider.com. https://www.businessinsider.com/how-college-athletes-are-getting-paid-
from-nil-endorsement-deals-2021-12 (accessed March 2, 2023).
[11] Business Insider. “College Athletes Share Financial Advice for Managing Their Money
Under New NIL Rules.” BusinessInsider.com. https://www.businessinsider.com/college-athletes-
financial-advice-ncaa-rules-nil-pay-2021-7 (accessed March 2, 2023).
[12] CNBC. “College Athletes’ Guide to Managing Their Money Under New NIL Laws.”
CNBC.com. https://www.cnbc.com/2021/07/21/college-athletes-guide-to-managing-their-money-
under-new-nil-laws.html (accessed March 2, 2023).
[13] NerdWallet. “Financial Tips for College Student-Athletes.” NerdWallet.com.
https://www.nerdwallet.com/article/finance/financial-tips-college-student-athletes (accessed
March 2, 2023).
Social Media Post Ideas
Idea 1: Create a post about saving and investing while avoiding excessive debt and use the five
bullet points listed above. You can create an engaging carousel of images if you are really
feeling the creative vibes.
Idea 2: Create informational posts, maybe even a single infographic, about NIL Money and how
to properly manage those funds. An especially impactful post would talk about the tax
preparation element.
