The Two Money Rules Every College Athlete Should Follow
College athletes have financial opportunities that previous generations never had.
Through NIL compensation, sponsorships, appearance fees and social media partnerships, many student-athletes are earning meaningful income before they graduate.
That can be exciting. It can also create financial decisions athletes may be facing for the first time.
Two simple principles can help create a stronger foundation: the Pay Yourself First Rule and the 10% Debt Rule.
Rule 1: Pay Yourself First
The Pay Yourself First Rule means setting aside part of every payment for savings or investments before deciding what to spend.
For a college athlete receiving NIL income, that could mean automatically directing 15% of every payment into a savings or investment account before spending money on clothing, travel, entertainment or other lifestyle expenses.
The idea is simple:
Saving should happen first, not with whatever happens to be left over.
That can be especially important for athletes because income may fluctuate significantly.
An NIL deal that produces meaningful income this year may not exist next year. Playing opportunities can change. Injuries happen. College careers end.
Building savings while money is coming in creates flexibility when circumstances change.
Starting early also gives athletes more time to benefit from compound growth.
Rule 2: Keep Debt Payments Below 10% of Income
The second principle is the 10% Debt Rule.
Under this guideline, monthly debt payments should generally remain below 10% of income.
This can be especially useful for athletes who suddenly have access to income and may be tempted to finance expensive vehicles, luxury purchases or other lifestyle upgrades.
A large car payment may seem manageable while NIL checks are arriving.
The problem is that the payment can remain long after the income changes.
For an athlete whose earnings may fluctuate from year to year, taking on too much fixed debt can quickly reduce financial flexibility.
Temporary Income Can Create Permanent Habits
NIL income can be significant, but it may also be temporary.
That makes the habits built around the money especially important.
Athletes who automatically save part of what they earn and avoid taking on excessive debt are putting themselves in a better position to build wealth instead of simply increasing their spending.
The amounts will be different for every athlete.
The principles do not have to be.
Save before you spend.
Be careful about taking on debt that depends on today’s income continuing tomorrow.
Those habits can remain valuable long after the final NIL payment arrives.