Four Financial Skills Every Young Athlete Needs—and How to Pick Which One to Master First

Young athletes face unique financial challenges due to short careers and variable income. This guide outlines four essential skills—budgeting, saving, investing, and tax planning—and offers a self-assessment to help prioritize which one to master first for long-term financial security.

Yara Haddad

November 8, 2026 · 5 min read

The four skills that matter most for a young athlete are budgeting for variable income, saving for a short career, investing early, and tax planning for complex earnings. What makes athletes different from other young earners is not just how much they make, but how briefly they make it and how unevenly it arrives. Research on retired professionals shows athletes can begin declaring bankruptcy as early as two years after their careers end, and a study published in the American Economic Review in May 2015 by Colin Camerer, Annamaria Lusardi, Kyle Carlson and Joshua Kim found that 16% of NFL players go bankrupt within twelve years of retirement. The right first skill depends on your situation, and this guide includes a self-assessment to help you find it.

The Unique Financial Landscape of Young Athletes

Athletic careers compress a lifetime of earning into a decade or less. As Amerant Bank's guidance for athletes preparing to go professional explains, athletes often have fluctuating incomes, with periods of high earnings followed by periods of low or no earnings. That pattern breaks the assumptions behind ordinary personal finance advice, which assumes a steady paycheck arriving twice a month for forty years.

The Global Financial Literacy Excellence Center (GFLEC), whose research on athlete bankruptcy appeared in the American Economic Review, frames financial knowledge as a critical part of an athlete's transition out of an active professional career. The stakes are concrete: many professional athletes lack the skills to manage personal finances effectively, and financial problems are common among retirees. The earning window is short, the income spikes are large, and the margin for error is thin.

College athletes face the same pressures earlier than ever. With the arrival of NIL (Name, Image, and Likeness) deals, student-athletes can now earn significant income while still in school, which means money-management decisions arrive before most athletes have any financial training. This article addresses the financial management side of NIL earnings, not the legal or contractual details.

The Athlete's 'Confidence-Reality Gap' in Financial Literacy

The most striking research finding about young athletes is not that they lack financial skills—it is that they do not believe they lack them. Merrill Lynch's research on the financial reality of young athletes found that while 80% rate their financial literacy as "good" or "excellent," their day-to-day experiences reveal a different story: 32% feel financially insecure, and 21% report being financially stressed about their current situation.

The behavioral data exposes the gap further. According to the same Merrill Lynch research, 48% of young athletes maintain a budget, but just 19% stick to it consistently, and 61% struggle with the complexities of NIL deal navigation despite these being critical income sources. Confidence, in other words, is not translating into consistent behavior.

The gap is not evenly distributed. Merrill Lynch found that athletes from middle and lower socioeconomic backgrounds experience even higher levels of financial insecurity (45%) and stress (30%), indicating that confident self-assessment does not always translate into financial peace of mind. And the confidence itself may be misplaced: a 2025 study in the Journal of College Student Development, using data from the 2020 National Postsecondary Student Aid Study, found that student-athletes generally exhibit lower financial literacy than their non-athlete peers, even after controlling for demographic and institutional factors, with significant disparities by gender, race, and institutional characteristics.

Essential Financial Skills for Athletes: A Targeted Approach

Budgeting for variable income. Because athletic income arrives in spikes and droughts, a budget built on a single monthly figure will fail. Amerant's guidance recommends creating a budget that explicitly accounts for fluctuating income, living within your means, and avoiding unnecessary expenses so you can maintain stability during periods of low income. Athletes for Hope, an organization providing financial literacy education for athletes, structures its own budgeting curriculum around tracking variable income and balancing saving, spending, and giving.

Saving for a short career. A short career means savings must do the work that decades of paychecks do for other workers. Amerant advises athletes to start planning their finances as soon as they start earning, which allows them to maximize earnings, take advantage of compound interest, and prepare for an early retirement. The alternative is visible in the bankruptcy research: neglecting early preparation often leads to financial distress after retirement.

Investing early. Because athletes' careers end young, their investments must have time to grow long after the paychecks stop. Amerant recommends working with financial advisors to develop a savings and investing strategy early, and Athletes for Hope's education series covers the fundamentals of investing for long-term financial growth.

Tax planning for complex earnings. NIL deals, multi-state competition schedules, and irregular income patterns create tax situations that standard advice does not cover. Merrill Lynch's research notes that traditional financial guidance often falls short when addressing athlete-specific challenges like NIL negotiations, irregular income patterns, and industry-specific tax considerations. Understanding the tax implications of your earnings is part of managing, growing, and protecting them.

If this describes you	Your documented risk	Learn this skill first
My income swings between high and low or no earnings	Instability during low-income periods	Budgeting for variable income—build a budget around your lowest-earning months, not your best ones
I earn well now, but my career could end within a few years	Financial distress after retirement; bankruptcy risk documented among retired pros	Saving—start setting aside money as soon as you start earning, to prepare for an early retirement
I have a NIL deal or other complex earnings	61% of young athletes struggle with NIL complexity, per Merrill Lynch's research	Tax planning—understand the tax implications of your earnings before they compound into problems
I feel confident about money but do not track it consistently	The confidence-reality gap: 80% rate their literacy highly while only 19% stick to a budget	Budgeting—replace self-assessment with a written budget you actually follow
I have steady savings but nothing invested	A short career leaves little time for money to grow	Investing—work with a financial advisor to build a long-term strategy that benefits from compound interest

Four Financial Skills Every Young Athlete Needs—and How to Pick Which One to Master First

The Unique Financial Landscape of Young Athletes

The Athlete's 'Confidence-Reality Gap' in Financial Literacy

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Essential Financial Skills for Athletes: A Targeted Approach

Your Personalized Financial Playbook: A Self-Assessment

Taking the First Step Towards Financial Security

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