College athletes, Old National Bank and financial guidance in the era of NIL

By Ben Joergens, Financial Empowerment Program Director, VP, Old National Bank

By Ben Joergens, Financial Empowerment Program Director, VP, Old National Bank

The college athletics landscape changed forever in June of 2021 when the NCAA implemented the Name, Image and Likeness (NIL) policy, allowing a student-athlete to make money from their personal brand. The decision has also shined a light on student-athlete finances and budgeting, as college is the time when students (athletes or not) need to learn to live on a budget, regardless of their income.

As student prepare for their financial lives post-college, they can take heed from the current sobering statistics of adult finances in the “real world”:

• More than 60% of all adults live paycheck to paycheck
• Approximately 50% of adults that make six figures or more live paycheck to paycheck
• Approximately 78% of NFL players and 60% of NBA players face serious financial hardships after retirement
• The average NIL deal for student athletes is between $1,000 to $10,000

The biggest challenge for students is to watch their spending to track it. Students need to literally live in a budget that's going to maintain them through college, rather than living the equivalent of paycheck-to-paycheck. This early financial acumen, and meeting with a financial advisor to set a desired course after college, will pay dividends.

I've seen NFL athletes show how they live off $60,000 to $70,000 a year, and these are athletes that are making millions, because they know long-term that they are going to need that money when their athletic career is finished. Student athletes can get their finances in order with the help of a financial advisor to:

• Plan for all expenses (costs for housing, vehicles, insurance, etc.)
• Save for the future (Roth IRA, etc.) to allow for an early retirement
• Prepare for a post-athletic career that, even if you go pro, will be finished by age 30-35
• Establish excellent credit
• Build an emergency fund

If, as a student athlete, you’re one of the talented and lucky less than 2% that goes on to a pro career, it will likely be finished by age 30-35. So, if you live until age 75-80, that’s another 45-50 years living from the income you made as an athlete. And that’s why you see so many pro athletes going into broadcasting, coaching, or other jobs to supplement their income.

As the official bank of the Big Ten Conference, we work with athletes to take on the discipline of personal finance, meeting with a licensed financial advisor to protect earnings and cover expenses. At Old National we also conduct many workshops in low-to-moderate-income communities with families who are “unbanked,” or do not have a history of working with mainstream financial institutions, or have a mistrust of financial institutions from working with non-mainstream services that left them with long-terms fees and high-interest credit debt.

Savings and the difference between the ‘haves’ and the ‘have-nots’

I've got friends that are doctors that have very lavish lifestyles, but not much to show for it in the bank. Should something ever happen to that profession, and not having the money to fall back on, that’s something that needs to be planned for.

I look at Tiger Woods, who was a role model of mine growing up. He was accepted to Stanford at a very young age and had golfing success, but his mom always told him that you’ve got to finish college and have a “Plan B.” Golf might not have worked out for him, and he's also had injury after injury, along with other life events that curtailed his career. He hasn't been able to play on the pro tour as much as expected, so now he designs golf courses as a “Plan B,” and he's found another stream of income. Even outside of the world of athletics, people need to have a financial backup plan.

Take advantage at this age, as a student, to figure out what your long-term goals and dreams are -- whether it's buying a house, raising a family, getting married, retirement, etc., and start saving for those things right away. Then, with whatever's left, build your lifestyle after that. Then you can feel the security of proper financial planning and enjoy life as you age and approach retirement.

For more information on student-athlete or student financial planning, connect to an ONB financial advisor or check out ONB’s Real Life Finance page.

As student prepare for their financial lives post-college, they can take heed from the current sobering statistics of adult finances in the “real world”: I've seen NFL athletes show how they live off $60,000 to $70,000 a year, and these are athletes that are making millions, because they know long-term that they are going to need that money when their athletic career is finished. Student athletes can get their finances in order with the help of a financial advisor to: