Never dreamt of receiving a lump sum of cash overnight? Unsure how to use it? We understand. 

Keep was created to not only help employers retain their best talent, but to give employees an opportunity to attain some financial freedom earlier in life and set them up for long-term success. 

If you’re new to Keep and just received a vesting bonus from your employer, here are 5 ways you could use it, in no particular order: 

  • Pay off debt

There are many benefits to being debt free, including the fact that more of your income is now available to you. Income you had been using to pay off debt is now yours to spend or save as you wish. By paying less, it will feel like you’re earning more. Whether you use the money for monthly expenses or something bigger like your dream trip, you can enjoy the flexibility and financial freedom that comes with being debt free. 

Other benefits of paying off debt include less financial risk, improved credit score, early retirement, less stress, overall increase in mental health, higher self-esteem, increased productivity, and more.

  • Save or Invest

By saving or investing, you have the potential to grow your wealth over time. Through compounding returns, your money can generate additional income, leading to substantial growth in the long run. Saving or investing for retirement is crucial to ensure a comfortable and secure future. By starting early and consistently contributing to retirement accounts, such as a 401(k) or Individual Retirement Account (IRA), you can benefit from the power of compounding and potentially enjoy a financially independent retirement.

Research shows that investing in the stock market, over the long term, has historically provided higher returns compared to traditional savings accounts. While investing carries risks, a diversified portfolio and a long-term investment horizon can help mitigate those risks and potentially yield higher returns.

  • Create an emergency fund

Building up savings or investment portfolios can provide a safety net in case of emergencies or unexpected expenses. Having a financial cushion helps reduce stress and provides peace of mind.

Research consistently shows that individuals with emergency funds experience higher levels of financial security and peace of mind. Knowing that you have a dedicated fund to handle unexpected expenses or emergencies reduces financial stress and improves overall well-being.

An emergency fund serves as a buffer during times of financial hardship. It helps you avoid going into debt or relying on high-interest credit cards to cover unexpected expenses. Research suggests that individuals with emergency funds are better equipped to handle financial shocks and are less likely to accumulate debt.

  • Down payment

Looking to buy a home or make a large purchase? Putting down a significant cash down payment reduces the amount you need to borrow. This, in turn, can lead to lower borrowing costs, such as interest charges and fees. Research suggests that larger down payments often result in more favorable loan terms and lower interest rates.

Lenders typically view larger down payments favorably when evaluating loan applications. A substantial cash down payment demonstrates financial stability and reduces the lender's perceived risk. This can increase your chances of loan approval and potentially lead to more favorable loan terms.

  • Make a large purchase with cash

When you use cash to make a purchase, you eliminate the need to borrow money and incur debt. This can help you maintain financial freedom and avoid interest charges, late fees, and other costs associated with credit. By using cash, you bypass the need to pay interest on borrowed money. Credit cards and loans often come with high-interest rates, and over time, these charges can accumulate significantly. Paying in cash allows you to save money that would otherwise be spent on interest.

Our own employee research backs these tips up. In our Effective Compensation Survey, employees shared how they would use a lump sum of cash, should they receive one. 44% said they would pay off debt, 40% said they would save for retirement, 28% would create an emergency fund, and 21% would use the money for a down payment. 

The beauty of upfront cash like Keep’s vesting bonus is the freedom and flexibility to use it as you need, based on your personal situation in that moment. Keep is meant to provide smarter compensation for all - and we hope you enjoy the benefits from that innovative approach.