As a student-athlete, NIL (Name, Image, and Likeness) income can create an opportunity not only to support yourself but also to give back to your family and friends. It’s natural to want to share your success with the people who’ve supported you along the way, but without a plan, you could end up hurting your financial future.
It’s important to strike a balance between helping your loved ones and protecting your own financial stability. Let’s look at some efficient ways to give money to family and friends while making sure you don’t go broke and how to budget your generosity.
1. Set Clear Boundaries and Expectations
Before you start giving money to family and friends, it’s essential to set clear boundaries and expectations. Be upfront about what you can offer and what your limits are. Just because you have NIL income doesn’t mean you should feel obligated to solve everyone’s financial problems. Make it clear to yourself and your loved ones that your priority is long-term financial security for everyone, including yourself.
Example: Instead of providing an open-ended promise of financial help, consider setting a specific amount that you’re comfortable giving, and stick to it.
2. Create a Budget for Generosity
Budgeting isn’t just about covering your personal expenses—it can also include money you plan to give to others. Start by determining how much of your NIL income you want to allocate to helping your family and friends. A good rule of thumb is to set aside a percentage of your income specifically for generosity.
Suggested Breakdown:
- 10% for Giving: Allocate 10% of your earnings for gifts or support for family and friends.
- 50% for Personal Needs: Use half of your income for your day-to-day expenses, including rent, groceries, and bills.
- 20% for Savings/Investments: Build your savings and plan for your future, whether that’s paying off student loans, investing, or preparing for life after athletics.
- 20% for Long-Term Goals: This could include setting aside money for larger purchases or goals like buying a home or starting a business.
By creating a budget that includes room for giving, you can ensure that you’re being generous without compromising your financial future.
3. Prioritize Essential Needs
If you want to give money to family and friends but need to make sure it doesn’t strain your finances, focus on essential needs. Instead of giving out cash, consider paying for specific things that can make a tangible difference in your loved ones’ lives, such as:
- Covering a medical bill
- Helping with tuition costs
- Providing groceries or paying rent for a month
By focusing on essential needs rather than luxuries, you can provide real help without feeling overwhelmed by ongoing financial requests.
4. Consider Non-Monetary Support
Giving doesn’t always have to involve handing over cash. Non-monetary support can be just as valuable and can have a long-term impact. This could include:
- Helping a family member or friend find a job: Use your network or connections to help someone you care about land a new opportunity.
- Paying for professional services: Instead of giving money directly, consider paying for things like financial planning, legal advice, or even counseling that can help your loved ones get back on their feet.
- Providing mentorship or advice: Sharing your experiences and knowledge with family and friends can often be more beneficial than cash.
By offering non-monetary support, you can help people in ways that go beyond financial aid, setting them up for long-term success.
5. Give in Lump Sums, Not on a Recurring Basis
One of the best ways to avoid going broke while helping family and friends is to give lump sums rather than committing to regular, ongoing financial support. For example, if you want to help a sibling with college expenses, consider giving a one-time lump sum rather than promising to pay a portion of their tuition every month.
Giving lump sums allows you to stay in control of your finances while providing meaningful help. It also prevents your loved ones from becoming financially dependent on you.
6. Communicate Openly About Your Financial Goals
Transparency is key when it comes to managing family expectations. If your NIL earnings are substantial, some family members or friends may think you have an unlimited source of funds. It’s essential to communicate your long-term financial goals so they understand why you can’t give more than what you’ve budgeted for.
Let your family and friends know that while you want to help, you’re also saving for your future, whether it’s building an emergency fund, investing, or preparing for life after athletics.
7. Avoid Becoming the Family Bank
One of the pitfalls of giving money to family and friends is becoming the “family bank”—the person everyone comes to when they need financial support. To avoid this, it’s essential to stick to your budget and clearly communicate that your financial help has limits.
If you start feeling pressure to give more than you’re comfortable with, it’s okay to say no. You have to protect your financial well-being first to ensure you can continue helping others in the future.
8. Help Teach Financial Literacy
One of the most impactful ways you can help your family and friends is by teaching them financial literacy. Share the tools and strategies you’ve learned to manage your NIL income, such as budgeting, saving, and investing. Helping others build a solid foundation of financial knowledge can empower them to manage their own finances better in the future.
By teaching financial literacy, you’re giving a gift that lasts longer than money—it’s a skill that can help them achieve financial independence.
9. Work with a Financial Advisor
If you’re serious about helping your family and friends while protecting your financial future, it may be worth working with a financial advisor. They can help you create a solid plan for managing your NIL income and advise you on how much you can afford to give without hurting your long-term goals.
A financial advisor can also provide guidance on setting up tax-efficient ways to give, like using a gift tax exclusion or setting up a family trust, to ensure you’re making smart financial decisions when giving.
Conclusion: Be Generous, But Be Smart
Giving back to your family and friends can be one of the most rewarding aspects of earning NIL income, but it’s crucial to do it in a way that protects your own financial future. By creating a budget for generosity, prioritizing essential needs, and communicating openly, you can help the people you care about without going broke.
Being generous doesn’t mean sacrificing your own financial well-being. It’s about finding a balance and making sure that your giving is sustainable over the long term.
Written by Pat Brown, MBA, Former D1 Player