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Money Smart Athlete Blog

Financial Literacy Considerations for Student Athletes

By Demetris Constantinou, Contributor

As a student athlete, you always tend to believe that the most important thing you need to develop during college is the sport that you’re participating in. Truth is, this is partially correct, but there’s another aspect that most student athletes neglect: the importance of financial literacy. Starting from college, all the way until the end of your career in a professional league, you need to be aware of several basic financial literacy considerations which will prove vital to a successful financial journey. It is therefore best, if you develop the relevant life skills while you’re a student-athlete, before the ‘real world’ catches you unprepared and drags you down an undesirable path of financial hardships.

This article aims at enumerating certain financial literacy considerations and the relevant financial skills that student athletes need to develop while they’re in college. Moving forward, we’ll seek to highlight the importance of each consideration, and how it can help you during college and later in your professional career:

First Consideration: The power of Budgeting

I like to think of budgeting as the stepping stone of your financial freedom, given that a proper budget can help you go through life without having to worry that you’ll run out of money, or that you’ll never be able to buy your dream car or take your dream vacations. Budgeting is essentially planning your finances in advance, based on forecasts -things you know will probably happen- rather than assumptions. To put things into perspective, when you’re in college, you know that during your four years you’ll be receiving an annual $5,000 financial grant; you haven’t received that yet but it’s a future event that will likely happen given past events. When budgeting, you need to use that amount as your basis and not the $100 that you might find in front of you while walking.

Now that we’ve established what’s a forecast and what’s an assumption, it’s important to list what goes into a budget. A budget is comprised of money that you’ll earn less the money that you’ll spend. When you’re a student athlete, you know that each year you’ll be receiving $5,000 in grants with which you need to pay your rent, food and clothing as well as any other expenses. When doing your budget, you need to make sure that your income -grants in our case- will be greater than your expenses -rent, food and clothing- in order to avoid running out of money. If you realize that indeed the $5,000 are not enough to cover everything, then you need to see  how you can increase the incoming cash-flows through, perhaps, student loans or financial help from your parents; you might also have to adjust your costs and see how you can reduce them to be able to have a balanced budget. Having said the above, budgeting is equally practicable when you move forward with your professional career, the only difference is that the sources of income and expenses increase along with the figures that you’ll be dealing with. What remains the same though is the concept which, if correctly applied and understood while you’re in college, will be easily applied during your professional career and form the foundation of your financial freedom.

Second Consideration: Saving

I know that saving money sounds boring, after all, who doesn’t want to spend all their money on what makes them happy right now and wait for the future. As boring as it might sound, saving money is amongst the most important fundamentals of financial literacy and can act as a catalyst for securing athletes’ financial well-being throughout their life. We’ve talked in older articles about how athletes only “work” for a smaller period in their time compared to the average employee. This makes savιng money a must for athletes who don’t want to run out of money by the age of 35. I realize that while you’re a student there’s not much to save so it’s important that you at least familiarize yourself with the concept of saving while you’re in college. A small thing that you can do in college to immerse yourself in the culture of saving is to put a $1 on the side every day. By the end of college, you’ll have around $1,460 which will help you at least appreciate the magic of saving and understand the culture of saving. Once you’ve grasped the purpose of saving and the results it can lead to, you’re more than prepared to face the “outside world” and start saving money from the first day of your first professional contract.

Third Consideration: Investing

Realistically speaking, nobody expects a student athlete to become the “Wolf of Wall Street” neither during college, nor later in life. Nevertheless, it’s important that an athlete understands the potential risks and benefits embedded in investing at an early stage in their life. While you’re in college, you’re not expected to undertake any investments as you should be more concerned with meeting your budget and making sure you don’t run out of money.

What you can do though is enroll into a basic economics/ finance or accounting course that will teach you the very basics that you need to know to assess future investment opportunities in life. These courses might not interest you, or at worse, disgust you but trust me when saying that you’ll thank yourself for doing so while you’re in college. A totally ignorant professional player can easily fall for obvious investment traps while an informed player will recall their basic financial education in college and be able to distinguish between obvious investment scams and actual investment opportunities. To put things in perspective, while you’re in college, during your basic finance course, you learn that there’s no such thing as low risk/ high return. Just by grasping this, you’re able to turn down “investment opportunities” later in life that promote to double your money without any risk. Alternatively, if you’re not familiar with any investing fundamentals while you’re in college, you can easily fall for scam “investment opportunities” and even lose a lot of money. As a result, by familiarizing yourself with investing fundamentals while you’re in college, you’re essentially making a favor to your future self.

Having listed the above considerations, it’s important to note that this is by no means an exhaustive list of everything that you need to be aware of, nor can it replace your personal financial planner. These considerations should act as the bricks towards building a solid financial literacy foundation that you can refer to, not only while you’re a student athlete but also later in life when you’re a professional player and are required to have in mind the fundamentals that will lead the path to financial freedom.

For more information on Financial Literacy Considerations for Student Athletes and details of our comprehensive Student Athlete Financial Literacy Curriculum you may contact us at