From endorsement deals to social media sponsorships, many college athletes are earning significant money while still in school. However, with this Name, Image and Likeness earning potential comes great financial responsibility.

Managing this newfound wealth can be tricky. Many college athletes make mistakes that put their financial security at risk, not just during their athletic careers but also in the years that follow. Below, we outline the top mistakes college athletes make when managing their NIL and endorsement money—so you can learn what to avoid.

 

1. Spending Without a Budget

Landing that first endorsement check can feel like winning the lottery, but without a budget, it’s easy to blow through your earnings faster than you think. Many athletes underestimate their expenses (tuition, training costs, personal expenses) and overspend on non-essential purchases like trendy clothes, luxury gadgets, or even vehicles.

How to Avoid This Mistake:

• Track Your Income & Expenses: Use a budgeting app to monitor where your money goes.

• Live Within Your Means: Don’t spend money just because you have it. Plan for both necessary expenses and savings.

 

2. Ignoring Taxes

One of the most common mistakes athletes make is forgetting about taxes. Unlike a regular paycheck with taxes automatically deducted, NIL earnings are often paid out in full, leaving the athlete responsible for paying taxes come tax season. The IRS (and state governments) will expect their share, and the last thing you want is an unexpected tax bill.

How to Avoid This Mistake:

• Set Money Aside for Taxes: A general rule of thumb is to save 20–30% of your income for federal taxes, depending on your income bracket.

• Hire a Tax Professional: Consider consulting with a CPA who understands freelance incomes and endorsement deals to guide you through filing taxes correctly.

 

3. Not Seeking Financial Advice

It’s easy to rely on friends, family, or teammates for financial advice, but managing NIL money often requires professional expertise. Without the proper guidance, athletes can miss out on opportunities to grow their wealth or even end up in financial trouble.

How to Avoid This Mistake:

• Work with a Financial Advisor: Professional advisors can help manage your money wisely, plan for the future, and even invest your earnings.

• Attend Financial Literacy Workshops: Many schools and sports organizations now offer resources to teach athletes essential money management skills.

 

4. Overcommitting to Deals without Understanding the Fine Print

When you’re new to sponsorships and endorsements, it’s tempting to sign as many deals as possible. However, these agreements often come with fine print, which may include exclusivity clauses, deadlines, and deliverables. Rushing into too many deals can lead to missed obligations—or worse—legal trouble.

How to Avoid This Mistake:

• Hire a Legal Expert: Always have a lawyer review contracts before signing. They’ll help you understand what’s expected of you and protect your interests.

• Prioritize Quality Over Quantity: Focus on brands that align with your values and make sense for your personal brand, rather than saying yes to every offer.

 

5. Not Saving for the Future

Athletic careers, especially in college, are often short-lived. What you’re earning now might not be available in a few years. Many college athletes fail to think about long-term savings plans, leaving them financially vulnerable if their athletic careers don’t pan out as planned.

How to Avoid This Mistake:

• Start Saving Now: Open a high-yield savings account or a Roth IRA to prepare for life beyond college and sports.

• Think Long-Term: Consider setting aside a portion of every NIL check for future goals, whether that’s graduate school, starting a business, or retirement.

 

6. Neglecting other Commitments 

While NIL deals may seem like the most important thing in the moment, neglecting your studies or athletic performance can have significant long-term consequences. Remember, your education and athletic career are both critical to your overall success.

How to Avoid This Mistake:

• Set Priorities: Balance your endorsements with your athletic and academic responsibilities. Time management is key.

• Ask for Support: Many schools offer programs to help student-athletes manage their new responsibilities effectively.

 

7. Falling for Scams

Unfortunately, the world of NIL deals comes with its fair share of scammers. From “get-rich-quick” schemes to fake brand sponsorships, failing to vet opportunities can lead to serious financial and reputational damage.

How to Avoid This Mistake:

• Do Your Research: Vet potential sponsors and partners carefully. If it seems too good to be true, it probably is.

• Work with Trusted Professionals: Agencies and advisors specializing in NIL deals can help protect you from scams.

 

NIL and endorsement revenue can be life-changing for college athletes, but it comes with responsibility. By avoiding these common money management mistakes—budgeting effectively, paying taxes, saving for the future, and seeking professional advice—you can make the most of your earnings and set yourself up for financial success.

If you’re ready to take control of your finances and grow your NIL income, start by building a plan today with Holbrook & Manter. Our experienced team is here to help you. Reach out to us now.