Name, Image, Likeness (NIL): What are your key money moves once you’ve signed the deal?

When the NCAA changed its rule about college athletes being able to benefit from NIL deals, the financial game changed too. Student athletes now face more complexity in their personal finances, often without much preparation. The good news is that taking a few simple steps can help the athletes set themselves up for financial wellness, today and tomorrow. Here are tips to get started:

With the proper planning, NIL income could be the first step for an athlete in creating multi-generational wealth.
— Adrian Ashford, Wealth Strategies Analyst, Merrill Wealth Management

#1 Decide what to do with the money.

The student athlete should establish some basic structure for how they would like to use their NIL money. The key categories to think about are: Are there expenses that must be paid today? Are there items they would like to purchase now? Is there anyone — a parent or a family member — that they need to help support? What types of things do they want to save for in the future (i.e., a car, a house)?

Learning to identify goals now can help establish solid financial habits for the future.

Explore how to prioritize savings goals

#2 Make smarter spending choices.

It’s a reality that an athletic career may only last a limited number of years in a long life. Making smarter spending choices today can help the athlete’s money last longer. That could mean spending less today on flashy items like cars and clothes to free up more money to put into savings that can be used later to help buy a home.


Watch this video on saving money every day

Athletes understand the importance of discipline to succeed in their sport. That same discipline is every bit as important when it comes to how they choose to spend money.

#3 Do a little today to create more tomorrow.

Why worry about starting a financial plan now? Imagine putting $1,000 today into an account earning 5% a year. Add another $1,000 each year for three more years. Keep it there — don’t touch it — and let it earn 5% a year. At the end of 20 years, that $4,000 in deposits more than doubles to $9,879.* That’s the power of compounding and it can work best when taken advantage of as early as possible.

#4 Get the basic accounts in place.

An NIL deal is the perfect trigger for setting up a checking account and a savings account. Maintaining two separate accounts allows the checking to help pay for expenses, while the savings can be used to save toward certain specific purchases (e.g., Spring break, a car, a home). Have a disciplined approach to put money into savings automatically and regularly.

 Discover more details about these essential accounts

#5 Create a budget.

Creating a framework for spending and saving is a great way to be in control. Break down spending into three categories: Needs, Wants and Savings. By allocating a certain percentage to each category, it can help achieve both immediate plans and longer-term goals. Being good at creating a budget and sticking to it can translate into being more prepared.

Follow this simple approach to get started

#6 Use credit wisely.


Watch this video on building credit from scratch

Accumulating a lot of debt or very expensive debt is the quickest way to unnecessarily reduce a large amount of wealth. Credit cards should be used wisely. Ideally, the full amount should be paid off each month to avoid paying extra money in interest.

With thoughtful planning, NIL income can help lay foundation of a thoughtful financial plan.
— Adrian Ashford, Wealth Strategies Analyst, Merrill Wealth Management

#7 Don’t forget to pay taxes.

Receiving income from your NIL is a nice benefit. However, athletes still need to pay taxes. Receiving NIL payments isn’t the same as being paid a salary by a company. Most likely, taxes are not being deducted from an NIL deal. Athletes must remember to pay their taxes from both monetary compensation (such as payments from endorsements and appearances) and non-cash compensation (such as gifts of trips, apparel or athletic equipment). Consider working with a tax advisor to ensure appropriate forms and payments are completed at the right time.

#8 Learn from our experience.

We work with athletes and sports professionals of all types. We understand the unique aspects of athletes’ earnings. Explore how we can help or reach out to us for a 1-on-1 conversation and let us help you build a customized wealth management strategy.

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*The scenarios provided are for illustrative purposes only, are intended to demonstrate the capabilities of Merrill, are not based on actual clients and do not indicate future performance or outcomes. They are not intended to serve as investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Results will vary, and no suggestion is made about how any specific solution or strategy performed in reality.