Five Accounts Every Student-Athlete Should Consider

Cha-ching! As a student-athlete — especially one with a name, image and likeness (NIL) deal — it can be crucial to establish healthy financial habits, including having the proper financial accounts set up. In addition, having a basic understanding of terms such as saving, spending and budgeting can help you stay on top of your financial literacy. For some student-athletes, this may be their first time earning this type of money and making financial decisions for themselves. Let’s review the types of accounts that may help student-athletes manage their money successfully.

Personal Checking

First and foremost, it’s important to have a personal checking account — or what we also refer to as your spending account — because you will likely use your personal checking account most often for your day-to-day spending. With this account, you can make payments and purchases, deposit or withdraw funds, and manage your money with ease.

Personal Savings

In contrast, a personal savings account is a safe and secure way to protect your hard-earned money and watch it grow over time. Try to save a portion of the money you earn each time you are paid by an employer, an NIL deal or a contract. Setting up sub-savers and naming them with your financial goals is a great tip to help with motivation. Saving can be thought of as investing in your future, so make sure you make it a priority.

Business Checking

A business checking account is a great way for student-athletes to keep NIL earnings and personal funds separate. You can use your business checking to receive and manage NIL income. You can also use this account to track any NIL expenses you may have.

High-Yield Savings

In addition to a personal savings account, it may be beneficial to open a high-yield savings account or certificate to earn more on any money you are saving. Certificates are a great option when you want a higher paying dividend account and have no immediate plans for the funds. Certificates allow you to take a sum of money and essentially “lock” it into a certain rate and length of time.

Investing

Another beneficial account for student-athletes to explore is an investment account. One option to consider is an individual retirement account (IRA). You can decide whether you want to open a traditional IRA or a Roth IRA based on your investing goals. Remember, before you jump into investing, it’s important to prioritize your personal savings. Many people are excited to start investing and may do so before building their savings. Without emergency savings, it can be difficult to access money quickly if needed.

Lastly, don’t forget to lean on people you trust for guidance to help you navigate this new financial journey. Every path is individualized, so no two student-athletes will have the same financial aspirations or take the same steps to reach their financial goals. Remember to prioritize savings, use a budget to avoid overspending, and be intentional with your money to set yourself up for success later.

Sources:

https://www.athletesbureau.com/p/four-core-financial-accounts-for