Your First NIL Check: What to Do Before You Spend It

For many student-athletes, getting that first Name, Image, and Likeness (NIL) check is an exciting milestone. It’s validation of your hard work, talent, and brand. But before you rush out to celebrate, it’s important to pause and think strategically. How you handle this first payment will set the tone for how you manage future earnings.

Below are practical steps to make sure your NIL money works for you—not against you.

Step 1: Understand What You Actually Earned

When you see the number on your NIL check, remember—it’s not all yours to spend. NIL payments often come as independent contractor income, which means taxes aren’t automatically withheld. That $5,000 check might look like $5,000 in your bank account, but the IRS (and possibly your state) will want their share later.

Pro Tip: A good rule of thumb is to set aside 25–30% for taxes right away. This ensures you won’t be caught off guard when tax season rolls around.

Step 2: Build a Simple Budget

Before you think about big purchases, map out where your money should go. A basic framework could look like this:

• 30% for Taxes: Put it in a separate account so you don’t accidentally spend it.

• 40% for Savings & Future Goals: This could mean an emergency fund, paying down student loans, or investing in your long-term future.

• 20% for Essentials: Everyday needs—transportation, groceries, equipment, etc.

• 10% for Fun: Yes, you’ve earned the right to enjoy some of your hard work—but within reason.

Budgeting may not sound exciting, but it’s how you protect yourself from overspending and create financial stability.

Step 3: Create a Financial Plan

Your first check is just the beginning. NIL earnings can fluctuate—some months may be big, others quiet. Having a plan helps you navigate the ups and downs.

Think about:

• Short-term goals: Covering school-related expenses, saving for travel, or buying equipment.

• Mid-term goals: Building a cushion for life after college, starting an investment account, or paying off debt.

• Long-term goals: Retirement may feel far away, but even small contributions to an IRA or investment account now can grow significantly over time.

Step 4: Track Everything

NIL income often comes from multiple places—social media promotions, appearances, camps, or product partnerships. Keep detailed records of:

• Who paid you

• How much you earned

• Any related expenses (travel, equipment, marketing costs)

Not only will this help at tax time, but it also helps you evaluate which opportunities are worth your energy.

Step 5: Surround Yourself with the Right Team

You don’t have to figure it all out alone. Consider working with:

• A financial advisor who understands NIL rules and athlete needs

• A tax professional to keep you compliant and efficient

• A mentor or coach who can help you see the bigger picture

The earlier you get good guidance, the stronger your financial foundation will be.

Final Thoughts

Your first NIL check isn’t just a payday—it’s an opportunity to build financial habits that will last long after your playing days are over. By setting aside money for taxes, creating a budget, making a plan, and surrounding yourself with the right advisors, you’ll avoid common pitfalls and position yourself for long-term success.

Remember: NIL is about more than today’s money—it’s about your future.