Money Smart Athlete Blog

How the Money Smart Athlete can overcome financial failure through financial literacy

By Constantinos Massonos, Contributor

Professional athletes are widely recognized as some of the most influential people of our times, appearing in articles and videos everywhere; TV News, magazines, newspapers and social media. Viewers and readers find the stories behind the athletes’ lavish lifestyle and athletic performances intriguing and the athletes with the greatest achievements and influence can be considered role models. The celebrity status achieved by many athletes, makes stories of them going bankrupt, attract a lot of attention and immediately hit the headlines.

As professional athletes’ salaries grow larger, so does the number of individuals who are looking to prey on their wealth. An examination of where the athletes’ financial failure is rooted, in one of our previous articles (read here), shows that bankruptcy is not a result of a sudden event but a result of a series of bad decisions. They may fall victims of financial schemes led by dishonest advisors and, reckless spending can bring havoc in their finances at any stage of their career. Although the above-mentioned external factors might be difficult to alter, being inherent to an athlete’s mindset and part of everyday life, educating athletes to make sound financial decisions by cultivating financial literacy as a life skill can be a real game changer for an athlete responding to financial setbacks.

Sports related organizations from all around the world, have already recognized the significance of financially educating their athletes to help them, ideally avoid, or deal with any future financial setbacks. Several different financial literacy programs are being designed and implemented to increase the financial literacy levels of professional athletes. Some of them focus on educating the athletes at an earlier stage of their career, such as the NBA Rookie transition program, while others are aimed towards the life of the athlete after the end of their career, like the IOC’s Career+ program.

A financial literacy program for athletes, should focus on educating them in:

  • Realizing that their career is short
  • Preparing for a second career either as an employee or as an entrepreneur
  • Learning to consult and work with trustworthy professionals
  • Dealing with requests for money from friends and family
  • How developing their brand and personal marketing strategy will help them stay in the spotlight for much longer than their athletic career will.
  • Being conservative and not get carried away by the celebrity lifestyle
  • Setting a budget and following it

If you are a professional athlete and you find yourself in a tough financial spot, don’t give up, it’s not the end of the world. Realizing that financial loss is not a permanent condition and deciding to financially educate yourself can be an important first step towards bouncing back. The knowledge you build, will be the basis of the action plan you will devise to get yourself out of financial trouble and avoid mistakes of the past.

If you are not sure where you can turn to in order to get financial education, you can check with your local sport federation, league or players’ union for relevant information. You can also send us an email on [email protected].  Our team is always eager to advise and guide you in connection with appropriate financial education programs which suit your needs.