By Constantinos Massonos, Contributor
Students entering tertiary education, including student-athletes, don’t usually have any previous experience in financial management, so when they are suddenly exposed to situations where they have to handle multiple income streams and prioritize payments, the task seems daunting. Not surprisingly, this new responsibility can cause an adverse emotional effect on students leading to an increase in stress, depression and anxiety levels.
For student-athletes, who already have their hands full trying to balance between their athletic, academic and career development, receiving an athletic scholarship in the form of a lump sum or incremental payments, creates the responsibility of ‘properly managing this money’
To confront this issue, student-athlete unions are co-operating with universities and their athletic departments to create programs that aim to financially educate student-athletes, using a wide array of education methods either on campus or online. The main education goal of such programs is to create student-athletes who are financially responsible while studying, but are also prepared to take important financial decisions that may impact their life beyond college.
Beyond achieving their main goal, financial literacy programs for athletes can further benefit student-athletes and the society in a number of ways:
- Understanding the importance of setting financial goals early in life, gives student-athletes the time and flexibility to plan accordingly and utilize the skills they have acquired towards achieving their goals.
- Bad financial decisions can cause financial stress which might even lead to student-athletes discontinuing their studies and quitting their scholarship. Applying the money management skills learned through a financial literacy program, can help student-athletes avoid financial pitfalls and the financial stress that comes with such pitfalls.
- Unfortunately, the greatest percentage of student-athletes, nearly 98 percent, will not become professional athletes. Athletes who remain undrafted will be able to utilize their financial literacy skills along with their degree, to adapt to their new reality, that will probably involve less income than planned.
- Student-athletes will be able to see themselves as a “brand” early in their career and understand that they have the potential to earn income not only in the form of wages and prize money, but also potential endorsement deals, commercials and appearances. The way they project themselves in the field of play, on TV and social media will have an effect on the way people perceive them now and in the long term and it can lead to additional revenue streams for the young athletes.
- The financial education program should help student-athletes understand that their athletic career will eventually come to an end. Proper planning through the use of their financial management skills can help student athletes make the most of their income, transition to another career after sports or even have the luxury of retiring at a really young age .
- Financial education does not only benefit the individual who gains important life skills but the economy in general. Consumers who are able to make informed decisions about financial products and services benefit not only themselves but also contribute to the broader economic stability.
It is important for universities to change their policies and require all students, not only student-athletes, to take financial literacy courses, attaining knowledge that will allow them to get a better understanding of how to handle financial decisions that might impact them now and over the course of their lifetime.
For guidance on designing a financial literacy program geared towards student athletes you can contact us at [email protected]