Big life changes can be a lot of things – exciting, confusing, intimidating. Things like buying a first home, having a baby, saving for a child’s college tuition can all be pretty costly. In fact, over the course of your life, there are several stages where large expenses will have a significant impact on your lifestyle.
Our goal at Keep is to provide employers with a new form of compensation that not only helps them attract and retain key employees, but provides these employees with cash to help ease the burden of big life moments and support their personal financial goals. Structured as loans paid down by the employer, employees get a cash payment up front that vests over a set period of time that they stay with the company.
Let’s take a quick look at five major life milestones and how Keep can help employers support their employees along life’s journey.
Graduating from College
For many, becoming an adult begins with graduating from college with a degree that hopefully leads to a fulfilling and lucrative career. But once you have that diploma in hand, the student loan bills start coming in. According to the U.S. Department of Education, the average U.S. college student graduates with $37,013 in student debt, which is significant when the average starting salary is around $55,260. If a grad’s new employer offers them a Vesting Cash Bonus from Keep as part of their offer, that could amount to thousands of dollars in cash upfront that the employee could use to pay down their student loan or cover monthly payments as they get on their feet in the working world. This can help new grads entering the workforce enjoy that experience without having to stress about the enormous financial burden of student loans on top of their other ‘new’ expenses as a working adult.
Additionally, many new-to-workforce employees can’t initially participate in employer-matched 401k programs because they use all of their extra income to repay these student loans – meaning these employees aren’t able to start building wealth until later in life. So, a Keep bonus could give them a way to remove the student loan barrier and begin building long-term wealth early on in their careers.
Entering the Workforce
Once you officially enter the workforce, that opens up a whole new world of expenses. For example, potentially having to relocate to a new city with a higher cost of living, getting your first apartment, buying a car or monthly commuting pass, getting renters and car insurance, food and utility bills, among many other new expenses. Latest reports show the average rent in the U.S. for a two bedroom apartment is $2,065, which can obviously be significantly higher depending on location. Even after splitting that cost, a new employee would also need to have first month, last month rent and the security deposit ready when signing, which could be more than $3,000 all at once. These costs add up quickly and can put young workers, on a starting salary, in a financial hole – or severely limit their ability to save for the future. Again, especially for young workers facing a lot of “startup” costs, employers can differentiate their offers with a Keep bonus and really help employees with this transition.
Buying a Home
Putting down roots and buying a home can be one of the most pivotal life moments–and financial decisions–you will ever make. The search for the right house, in the right neighborhood, can be stressful. And after all that is decided, comes the mortgage. Being able to put down a large down payment can make all the difference for your mortgage payment and really take the stress out of buying a home. While it varies widely depending on location, the average homeowner in the U.S. puts down between $10,000 – $15,000 on their down payment–and if you’re in California or any booming city it could be 10x that average. Cash from a Keep bonus could help make a down payment a reality or help lower the mortgage amount and save money over time.
Starting a Family
Welcoming a new member of your family is an exciting time, but also comes with a variety of added expenses – from food and clothing to childcare for when the parents return to work. A new report from Child Care Aware of America found that the average annual cost of childcare in 2020 was $10,174. By having a nice nest egg saved up, through a Vesting Cash Bonus from Keep, parents may sleep easier at night (even if it is only for a few hours when that new baby arrives!).
Outside of immediate expenses during early childhood, cash from a Keep bonus could be put towards college savings, since the current average spent on a public university per year is around $21,000 and a private college more like $47,000.
Preparing for Retirement
And while you’re going through all these big life milestones, there’s always one life event that you must make sure you’re thinking about: retirement. Saving up so you can enjoy life after work, spending it with family and friends, or even vacationing at places you’ve always wanted to visit. Receiving a Keep bonus from your employer could be seen as catch-up funds toward retirement that can grow over time and end up being significantly more. That means employees can stop worrying about the next big stage of their life and enjoy what they have now.
There are many life events that come with significant costs, but these are five major examples that many people experience – and if an employee had financial support during these times, it could have a life changing, positive impact on their experience of these milestones.
The idea behind Keep is to give employers the opportunity to support the people who support their company.
Vesting Cash Bonuses from Keep can help employer’s stand out in a crowded recruiting market and help retain an employee’s loyalty and support, all while giving employees some financial freedom as they transition through various life stages. Want to learn more? We’d be happy to give you a demo of the Keep platform and the difference it can make in attracting and retaining your top talent.