When many in California think about bankruptcy, they envision a scenario in which working-class people become overwhelmed by financial pressure. While this is one set of circumstances that commonly leads to personal bankruptcy, it is not the only path to financial turmoil. In many cases, individuals have achieved high levels of success in their career field, only to find that they have little to show for it at the end of the day. Professional athletes are a prime example, and efforts are now being taken to educate them on better money management practices.
According to Bloomberg Business, as many as 60 percent of basketball players in the NBA are in severe financial distress within five years of retiring. Football and baseball players are also subject to a high risk of personal bankruptcy. Part of the problem stems from the fact that these players often receive enormous salaries and bonuses at a point in their lives when they may lack financial maturity. Another factor involves pressure to maintain a certain lifestyle, which leads many young athletes to spend money in irresponsible ways.
Currently, several of the nation's top athletic organizations are working to develop educational programs to help players improve their money-management savvy. Participants can receive counseling on investment strategies, budgeting, and educational opportunities that are available to them once they retire from their sport. Some athletes have access to career development programs that help them handle the transition from pro athlete to retirement, a shift that happens while they are still well below the average retirement age.
For those in California who are considering personal bankruptcy, it is important to understand the role that financial education can play in regaining financial stability. One doesn't have to be a player for the NBA or the NFL to take advantage of these types of services. Personal bankruptcy offers a chance for a fresh financial start, but the decisions made after that point rely upon gaining the skills and knowledge needed to make wise financial decisions.
Source: Miami Herald, "How to keep pro athletes from going broke? Send them to class", Sept. 11, 2016