Weekly financial Q&A, with questions on managing pro-sports career and life insurance.
Our son is 21, and he’s embarking on a career as a professional soccer player. The beginning money isn’t huge. He’ll only be making about $30,000 a year, and we want to know how we can help him manage this money and not get caught up in the idea that he has to live a glamorous lifestyle.
The whole soccer thing is pretty cool, but you’re right about the money. “Glamorous” isn’t the word I’d use to describe a $30,000-a-year job, even for a 21-year-old. I think the biggest thing here is to make sure he develops some emotional maturity and uses basic, common-sense guidelines to help keep things in perspective. If he makes a habit right now of budgeting and living on less than he makes, he’s going to have a lot easier time later on if he starts raking in the big bucks.
The biggest problem with professional athletes is they think the ride is going to last forever. I always tell players that NFL really stands for “Not For Long.” The average pro football player’s career lasts 3.7 years. That’s not a long time, and the same is true in other sports, too. There just aren’t a lot of Brett Favres running around out there.
Help him prepare his heart for two things. First, that it will probably be a short run. Enjoy it, be smart, then prepare to move on to the next part of your life, and develop a different career track. The second thing is that even if he beats the odds and ends up making a ton of money, he’s got to view the money as a responsibility and a privilege. This is when the common sense and maturity really come into play. You can’t run out and buy a bunch of houses and cars and expect even big money to last for long.
This could be a very cool thing for your son. But it’s only going to be cool if it brings blessings to him and doesn’t ruin his life!
How much do I need?
Does a single person with no dependents need life insurance? If so, how much?
A single person with no dependents doesn’t need much life insurance at all. You’re just looking at enough to cover final expenses and maybe take care of any outstanding debts. In most cases, around $8,000 will cover funeral costs. You just don’t want to leave things behind that would end up being a burden to someone else.
Lots of times you’ll find there’s a small life insurance policy built into your health care coverage. Check that out, or get with your human resources department if you have insurance through an employer. The last thing you want is for mom or dad to have to write a check to the funeral home on the worst day of their lives.
But having no dependents is the key here. If you had a spouse or kids, they would need to be taken care of after you were gone. That would change the whole equation. In that case, I’d recommend you have eight to 10 times your annual income wrapped up in a good, level term life insurance policy!
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