What is Financial Literacy and Why is it Important?

What is Financial Literacy and Why is it Important?

At the NBPA, we want to help develop our players both on and off the court. While it’s important to train your body to succeed in basketball, it’s just as important to train your mind to succeed in life. Basketball can only take you so far, so we want to make sure you’re equipped with the tools and confidence to be successful in the long run! For this reason, at our NBPA Camps, we teach an important life skill: Financial Literacy.

Through the program, we share lessons learned by our 450 members and teach core financial skills such as setting financial goals, developing a personal brand, building a budget, and understanding the value of financial education. 

To simplify it: We want to teach you about money. Because who doesn’t love money, right? This section of the blog will do just that. Welcome to Money 101 - Lets get into it!

What is Financial Literacy?

Before we get started, let’s first define what Financial Literacy is.

Fi-nan-cial / Lit-er-a-cy:

[ fai·nan·shl / li·tr· uh·see ] (noun)

A set of skills & knowledge that help us understand how money works

Sounds simple right? Well.. it can be and that’s what we’re here for. Financial literacy is a skill that often gets overlooked, but we understand its importance and believe in the value of starting early. The earlier in life you start to do something, the better you’ll be at it! 

Why is Financial Literacy Important?

Financial Literacy is essential to everyone, especially professional basketball players. If you don’t understand how to manage money effectively, how can you sign your next contract? Or negotiate your next sneaker sponsorship deal? Or even buy your favorite pre-game meal? 

These are just a few areas NBPA members have to think about, but it’s also essential to think about saving money. What if you get injured? Or cut from the team? Or the NBA gets shut down due to a global pandemic like the Coronavirus?

While it’s impossible to predict an unprecedented event like the NBA coronavirus shutdown, this is just another example of why financial education is necessary. With the NBA season suspended and players salaries being reduced, having savings set aside can offer a sense of security to what could otherwise be a very challenging time financially.

Because understanding how to manage money effectively is so important, the majority of NBA players hire professional financial, investment, and tax advisors to help them. The NBPA even offers financial and investment resources to provide additional support to players. Whether or not you end up making it to the league, practicing good money management habits is essential, and we want to make sure you have the skills needed to succeed. 

Just like in basketball, financial literacy is a skill you have to put in the time to master. Did you become a good shooter or ball-handler overnight? I highly doubt it! Same idea here, in order to build a strong financial skill set, you have to put in the time, energy, and effort to develop that craft; and we’re here to help you. 

Make sure to stay up to date with our Blog for more financial literacy tips. Keep an eye out because our “Keys to Financial Literacy” will be coming soon!