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Even Pro Athletes Need a Budget

Think making millions means you’ll always be rich? Think again! Even pro athletes, who sign massive contracts and earn more money in a year than most people make in a lifetime, can go broke—and many do! Without a budget, it doesn’t matter how much you make; if you spend more than you earn, the money disappears fast.

A budget is simply a plan for how to spend, save, and give your money. Without one, even a football player earning $10 million can end up with $0 if they splurge on luxury cars, giant mansions, and extravagant vacations. No budget = no money!

Famous People Who Lost It All

Some of the biggest stars in sports and music made fortunes—and then lost everything.

  • Mike Tyson ($400 million gone!) – Mike Tyson is one of the world’s most successful boxers. He made hundreds of millions of dollars, and then spent it all on mansions, cars, and even pet tigers.
  • Allen Iverson ($200 million lost!) – Allen Iverson was an amazing NBA player who spent his fortune on cars, clothes, and cash handouts. He went broke, but managed to climb out of debt with an old contract that paid him over time, and going back to work. 
  • Antoine Walker ($108 million vanished!) – Antoine Walker was an NBA great who just could not stop spending money. He ended up in debt despite making a $108 million fortune. He now helps young athletes budget and plan wisely.
  • MC Hammer ($70 million spent!) – Hired a staff of 200 people and lived way beyond his means. He was spending between $500,000 and a million A MONTH! By 1996 he filed for bankruptcy and was $9 million in debt. This story has a happy ending though. Now MC Hammer is a wealthy tech investor and leader in his community. He took the lessons he learned from his budgeting failures and turned them into a lifetime of success. 

Why Do Pro Athletes Go Broke?

It might seem crazy to you that people can make and spend that much money, but it’s good to learn from their mistakes because everyday people make them too, just on a smaller scale. Even with millions, bad money habits can lead to disaster. Common mistakes include:

  • Spending too fast – Thinking the money will never run out.
  • No savings – Forgetting that careers don’t last forever.
  • Bad investments – Giving money to friends or bad business deals.
  • No budget – Not keeping track of what’s coming in and going out.

How Can Athletes (and YOU) Avoid Going Broke?

  1. Make a Budget – Know where your money is going. Use the 50/30/20 rule to balance needs, wants, and savings so you stay in control of your money. Spend 50% on what you need, 30% on what you want, and save 20% for the future. 
  2. Save for the Future – Careers don’t last forever. Setting aside 20% of your income helps you build financial security for emergencies and retirement. Even if Mike Tyson had saved just 20% for the future he would have had $80 million for retirement. Not a bad little nest egg. 
  3. Spend Wisely – One sports car is cool. Ten? Not so much. Limit spending on wants to 30% of your income so you can enjoy life without going overboard. 
  4. Give Smartly – Helping others is great, but don’t overdo it. Be generous, but make sure your giving fits within your budget and financial goals.
  5. Learn About Money – The more you know, the better choices you’ll make! Understanding how to manage money helps you spend, save, and give with confidence. Get advice from experts. 

Even if you’re not making millions (yet!), budgeting is a lifelong skill. Whether you earn $10 from chores or $10 million in the NBA, a smart budget will keep you on track. Start practicing today because no matter how much money you earn, being able to make and stick to a budget will be a huge factor in your success.