Community Broker News and Views

Self-advocacy. Independence. Driving. When we think about all the things we need to teach our children, borrowing usually isn’t among them. In fact, for many children, particularly teenagers, borrowing seems to come naturally.

“Dad, can I borrow the car?”

“Mom, can I borrow 10 bucks?”

The truth is, if we want our children to reach their financial goals later in life, we really need to teach them how to borrow now. And, they’ll need to learn how to obtain loans from institutions other than Bank of Mom and Bank of Dad, which often provide unrealistic views of the risks of borrowing.

“Dad, I can’t pay you back the money I owe you because I spent it.”

So just what can you do to prepare your children for developing a healthy relationship with credit? Here are some parental pointers:

• Make sure your children understand what credit is and why it’s important. Ask them what kind of car or house they’d like to own someday and then show them how borrowing can help them achieve their goals. Show them an example of what their monthly payments would be and how much money goes toward interest.
• Teach them about credit score and history. It is important for them to know that mistakes they make when they are young can keep them from obtaining loans when they are no longer a student.
• Ensure they have a steady job. If your teenager is old enough to work, encourage them to get a job, since a steady income is essential to obtaining credit.
• Open a bank account with your child. Once your child has a job, they can begin putting money in checking and savings. They can obtain a debit card, which will teach them how to spend and manage the money they have responsibly.
• Get starter credit. If your child is 18 years or older, they may be eligible for starter credit. For example, DNB First offers a Student Banking program that provides a low-limit credit card to help students establish a credit history.

Your child may also apply for a department store charge card, which is easier to qualify for than a traditional credit card.

If your child does obtain credit, it’s important to emphasize the importance of paying off their balance in full each month to avoid interest charges.

One other important thing to remember is that despite the fact that your children may be quick to point out your “poor fashion” or other differences, they often try to be like their parents. So if you have a healthy relationship with credit, chances are your children will model your good habits, especially if you take the time to educate them.

Teaching your children about credit won’t always be easy, but in the long run, it will help them become more independent and less reliant on you. And you never know what that might lead to… maybe even a branch closing for Bank of Mom or Dad. Imagine that.

Vince Liuzzi serves as Executive Vice President and Chief Banking Officer at DNB First.

 

 

You don’t have to be a counselor to know that some relationships are better than others. Some bring out the best in you, while others can leave you feeling under appreciated and alone.

But shouldn’t you feel good about all your relationships, especially one of your most important ones – your banking relationship?

Your bank should not only be there to appreciate and understand your changing needs, but also help support them – at every stage.

Put your bank through the relationship test.

So how does your bank measure up in the relationship department? Here are some signs that your bank is “just not that into you.”

Increased fees. With interest rates so low over the past few years, many banks have been forced to find new ways to increase revenue. One of the ways they’ve accomplished this is by instituting fees for services that were once free. For example, some checking accounts that used to be “free” now require you “to jump through transactional hoops” or pay hefty maintenance fees. And some banks now charge for services that were previously free, such as online and mobile banking.

Poor rates. In today’s challenging economy, every dollar can make a difference. That’s why it’s important to get competitive rates on your loans and deposits. If your bank isn’t competitive with regards to rates, it may be time to move to a real competitor.

Lack of convenience. Technology has definitely changed the way we bank. With ATM banking and services like online banking and mobile deposit, you should be able to bank when, where, and how you want. If convenience is important and your bank isn’t keeping up, it may be time to move on from the relationship.

Impersonal service. Convenience is great, but what happens when you have a question or problem and want to talk to someone about your account? Are you able to reach an actual human being or do you get lost in a sea of endless automated telephone systems? If you actually speak with someone, are they knowledgeable and responsive to your needs?

Limited products. A good banking relationship should work for your complete financial needs. So you should be able to get your mortgage and your business loan in the same place you have your checking account. And your bank should reward you for all your business with preferred rates and other benefits. Your bank should also be able to serve your needs at every stage of life – from building your financial future to retirement.

It’s not you, it’s your bank; switch today.

If after reading this, you think your banking relationship is unhealthy, it may make sense to end the relationship by switching banks. At DNB First, we have a Switch Kit that makes moving your checking account and other accounts easy. We also have great rates, low fees, and local people who are here to help you. Try us out. We’ll have you at “hello.”

 

 

With Mother’s Day upon us, now’s a great time to honor the lessons and wisdom of our mothers. There’s one simple “motherism” that’s critical, especially when it comes to financial matters.

Prepare for emergencies.

Sadly, a recent survey by Bankrate indicated that many Americans have not heeded that advice: just “46% of the country’s consumers save less than 5% of their annual income.” Even more troubling is that “18% save nothing.”

Prepare to save.

With the uncertainty in the job market and soaring healthcare costs, a financial emergency could strike you or your loved ones at any time. The good news is that you don’t need a lot of money to get started. Here are five simple steps you can take to build savings – and peace of mind.

1. Ready, set your target …save. The first step in saving is to determine how much you need to save. Experts recommend that the amount in your emergency fund be between three to six months of your monthly living expenses.
2. Determine your budget. Once you know how much you’ll need, figure out how much money you can save each month. The best way to accomplish that is to look at your income and expenses to determine where your money is going.
3. Reduce expenses. Once you’ve analyzed your budget, look for ways to reduce expenses. For example, if you spend $200 a month dining out, consider eating in more and banking the savings.
4. Open a savings account. Be sure to put the money you save into a savings vehicle, not your checking account. Additionally, it’s a good idea to make access to the savings account more difficult. For example, try not to get a debit card with your savings account, which just makes it easy for you to get at your funds.
5. Automate your savings. One of the easiest ways to save is to have your savings direct deposited as part of your pay.

Once you’ve established your savings plan, be patient and stay the course. Your hard work will be paid off with peace of mind and security. And let’s face it, Mother always said, “Patience is a virtue.”

Put on your team cap. Take out your mitt. Baseball season has finally begun. And if you’re an aficionado of “America’s favorite pastime,” you know the most important factor in achieving success – good pitching. In fact, baseball experts repeatedly preach that “pitching wins championships.”

Good pitching can help you win in another arena – the business one. If you run a small business, having a successful “pitch” that describes your company or product/service can give you a powerful competitive advantage.

But what exactly is a “pitch?”

A business pitch is a well-rehearsed speech that concisely describes your company, product, or service. It’s also referred to as an “elevator speech” because your pitch is supposed to be made in front of a captive audience in the amount of time it would take to ride an elevator (well, at least an operating one).

The benefits of good pitching.

Though pitches vary greatly by company, they do have some common benefits. A good pitch can help you –

• Convince prospects why they need your product or service.
• Identify and reach the ideal target market for your product or service.
• Position your company or product or service against competitors.
• Facilitate networking, making it easier for your colleagues to understand what you offer.
• Strengthen your social marketing efforts.
• Attract potential investors.
• Empower you to speak confidently and clearly about your business – no matter where you are.

Tips to be on your best game.

What makes a good elevator speech? Here are five key elements:

• Be brief. An elevator speech should cause interest, not drowsiness. Try to limit your speech to a maximum of 60 seconds. Any longer than that, and you may lose the interest of your audience (or reach your floor).
• Make your introduction. Be sure to let your audience know who you and your company are.
• Define your product. What can it do to help your audience? What need does it fulfill?
• Discuss your competitive advantage. What does your product or company do better than the competition’s offering? Tell your audience about it in a way that’s interesting to them.
• Request action. If you’ve captured their interest in your product or service, be sure to tell them how they can act on it. You might, for example, present them with your business card and ask them to call you.

Be a champion for your business; perfect your pitch today.

Now that you know about the importance of a good pitch, practice working on yours. It just might help you hit a home run and stay ahead of the competition. And that is something to cheer about.

Vince Liuzzi serves as Executive Vice President and Chief Banking Officer at DNB First.

This past weekend, the world witnessed a record-breaking feat when 21-year-old Jordan Spieth was outfitted with the grand-prize green jacket at one of golf’s biggest events – the Masters at Augusta National. In his performance, Spieth accomplished something few Masters champions have done – to break from the pack and stay the course for the entire tournament.

Breaking from the pack and staying the course aren’t just important on the golf course, but in the course of running a business. Today, more than ever, it’s critical to find ways to pull ahead of the competition – and stay there.  Here are some pointers to help you:

Assess the field. What’s the competition for your product or service? You not only need to assess your competitors today, but also look ahead to anticipate who they will be tomorrow. Once you know who they are, analyze the strengths and weaknesses of their products or services.

Know your game. It’s also critical to know your company’s strengths and weaknesses. Are there target markets and geographic areas that are more favorable to you? Analyze where you are at your best and where you can improve. If a competitor does something better than you, find out what it is and how you can surpass them.

Plan ahead – and stay the course. Where do you want your business to go? Create a business plan so you can not only determine where you want to be, but also have a course map to guide you how to get there.

Challenge yourself. Your fiercest competitor shouldn’t be the business across the street; it should be you. How can you challenge yourself to make your company and your products and services better?

Get outside advice. Even golf pros need outside advice and guidance from their caddies. Talk to different people – your customers, bankers, industry experts, etc. – to learn about trends, needs, and opportunities to improve and excel.

Practice what you do best. If you’re good at something – servicing customers, delivering products – keep at it and let your customers and prospects know about it.

Update your equipment. If you can leverage the power of technology to better serve your customers or improve efficiency, you can get a powerful competitive advantage.

Love what you do. For many people, golf is a passion. Your business should also be a passion. When you love what you do, it shows. Your prospects may sense your passion and want to do business with you.

Lead by example. As a business owner, you are the role model for your employees. If you conduct yourself with honor and integrity, they will follow your example.

You won’t get a green jacket by following these simple tips, but you may be able to do something even better: stay the course in the black.

 

The season of growth, is finally in full swing. If you’re a homeowner, you may want to think about growing something even more valuable than your garden – the value of your home.

Spring is a great time for home improvements, but there are some that can yield better return on investment. Here are some smart ways to improve your home – and its value:

1. Building a deck. A new deck or patio is not only a great way to spruce up your back yard and build outdoor space, but also can generate as much as an 82% return on your investment if the deck is made of wood according to bankrate.com.

2. Adding more indoor space. In general, more space will make your home more valuable. Adding a new bathroom is the best way to add value to your home. You can either build an addition or transform existing space, such as an attic to create additional rooms, including an extra bedroom.

3. Remodeling your kitchen. The kitchen is one of the most used rooms in your home and arguably the most expensive to remodel. The good news is, you don’t have to undertake a full remodel, but you can consider upgrading your appliances, painting or refinishing existing cabinets, and upgrading countertops to freshen the appearance of your kitchen. A minor kitchen remodel can recoup nearly 80% of your investment. It’s important not to make renovations that cause your home to exceed the ceiling of house prices in your neighborhood.

4. Giving your bathroom a facelift. Another smart way to improve your home is to upgrade your bathrooms. Again, you don’t have to undertake a full remodel, but you can enhance the appearance of your bathroom by updating vanities, fixtures, mirrors, or flooring. You should be able to recoup approximately 70% of the cost of a bathroom remodel.

5. Replacing old windows. New windows will not only give your home a fresh and clean look, but also will help you reduce energy costs. Bankrate suggests that you could recoup up to 77% of your costs if you replace your old windows with new wood or vinyl windows.

The key to affording home improvements.

Now that you have an idea of what you can improve, how can you finance the costs? The answer may lie within your home or more specifically, your home’s equity. A home equity line of credit or loan is a smart way to borrow. It lets you borrow against the equity in your home and enjoy unique benefits – lower rates, potential tax savings, and flexibility.

Now that the seed has been planted, take a moment to learn what spring projects can help you improve your home’s value. Then, apply for a home equity line or loan. Get growing… while rates are still low.

Related links:

https://www.dnbfirst.com/index_2.php?page=Home_Equity_Lines_of_Credit

Vince Liuzzi serves as Executive Vice President and Chief Banking Officer at DNB First.

Don’t let the phrase, “Taking care of business,” fool you. In many ways, businesses take care of our local communities. They help create jobs, stabilize local neighborhoods, and generally improve the quality of life for us all.

Because of the importance of businesses, DNB First has undertaken a number of initiatives designed to give companies – of all sizes – the solutions and service they need to grow. These initiatives include:

• New Business Banking Services Division. Different sized businesses have different needs. To expand our capabilities in reaching smaller, locally owned businesses, DNB First has established the Business Banking Services (BBS) Division. 

• New Small Business Relationship Manager. To assist smaller, “Main Street” businesses, we created a new position and now have a dedicated Small Business Relationship Manager.

• Small Business Credit Solutions. Credit is essential in fueling the growth of all businesses. However, smaller businesses have unique challenges in obtaining the funds they need. DNB has created two new solutions to make it easier for business owners to obtain fast affordable financing – the Small Business Line of Credit and the Small Business Equipment Loan.

• Payroll processing. To assist business owners with the time-consuming and arduous task of processing payroll, DNB First has partnered with JetPay Payroll Services to offer a range of payroll solutions.

And most recently, to expand our geographic reach and capabilities for larger, commercial business, we are pleased to welcome seasoned commercial banker, Nabila Sajid. As Senior Vice President of Commercial Banking, Nabila will be responsible for leading a team of lenders in providing commercial and industrial lending (C&I) lending solutions.

From these initiatives, one thing is very clear: When it comes to building companies, communities, and better lives for us all, DNB First means business.

Vince Liuzzi serves as Executive Vice President and Chief Banking Officer at DNB First.

We’ve all heard the talk about the “generation gap” in America. In the 1960s and 70s, it was used to refer to the difference in attitudes and values between parents and their children, the “baby boomers.” Today that gap still exists, though those baby boomers are seeing it with their own babies, their children, or that growing population known as the “millennials.”

Not surprisingly, the values of millennials often differ greatly from those of their parents. However, what is surprising is that despite these gaps, millennials share a very big value of their parents – the desire to someday own a home.

This, however, does bring up a concerning gap affecting millennials– the difference between wanting a home and being able to actually afford one.

Homeownership Isn’t Cheap.

With the soaring costs of housing in much of America today, the goal of homeownership is much more difficult for millennials than it was for their parents. At home in Chester County, PA, for example, the median home price has reached nearly $300,000. The high price has resulted in one of the biggest barriers to homeownership for millennials – qualifying for a loan and raising down payment funds. Additionally, with private mortgage insurance required for down payments of less than 20%, they face higher mortgage payments that make qualifying even harder.

A Downward Trend.

Millennials face another challenge that their parents didn’t have to face – excessive student loan debt. This makes it harder for them to afford a mortgage payment, or even soaring rents. So, it’s not surprising that some have found a solution that’s close to home – living with their parents.

Knowing this, it’s not surprising that first-time buyer volume has dropped significantly. According to an annual report by the National Association of Realtors (NAR) in 2014, home purchasing by first-time home buyers reached its lowest level in nearly 30 years. Additionally, these younger buyers, which have historically made up about 40% of the overall purchase market, accounted for just 33% of home sales.

Making Homeownership Possible.

Homeownership is not just important to millennials; it is also critical to the communities where they live and work, since homeownership is key to economic stability.

As a bank dedicated to supporting our local cities and towns, DNB First has introduced a solution to encourage homeownership – the First-Time Home Buyers program. The program offers unique benefits to help remove some of the barriers to homeownership, including lower down payment amounts and reduced private mortgage insurance.

With this program and others like it, millennials may just be able to do something their parents were able to do – call a house their own. Though, unlike their parents, they probably won’t be calling from a rotary phone.

Vince Liuzzi serves as Executive Vice President and Chief Banking Officer at DNB First.

 

 

 

It’s the most frequently asked question at the checkout line. And it’s not “Paper or plastic?” or even “Do you want fries with that?” It’s one that gets posed the moment you reach into your wallet and pull out your debit card:

Will that be a credit or debit?

Many people just fire off a quick answer without even realizing that there’s a difference between the two options. They may be thinking it doesn’t matter because the money to fund the purchase comes from the same place – their own pockets – or more specifically, their bank accounts.

But, there really is a difference between using your debit card for a credit purchase versus a debit purchase. And because both involve your money, it’s probably not a bad idea for you to know that difference. Consider this:

• Using your debit card for a credit transaction. Using your debit card in this way is a little confusing. After all, it’s not really a credit card if you’re using your debit card and the money is coming from your bank account, right? Well, the reason it’s called a “credit” is because your transaction is processed by the same payment network as credit cards – MasterCard or VISA. It’s why, when you select the credit option, you are asked to sign the receipt or the screen, just as  you’d do if you paid by credit card.

Because these transactions are processed in this way, credit purchases made with your debit card are considered offline purchases, which have to be approved. So in essence, making a credit transaction with your debit card is like writing a check, which is why credit transactions made with your debit card are not immediately deducted from your account balance.

• Using your debit card for a debit transaction. In contrast, when you choose to pay by debit, the funds are processed through the ATM network, which is why you are asked to enter your Personal Identification Number (PIN) on the keypad. For this reason, debit transactions are considered online transactions and as a result, the funds are automatically deducted from your account balance immediately. Making a debit purchase is similar to making a withdrawal at the ATM.

And the Payment Answer for You Is…

The decision about whether to use your card for a debit or credit transaction really depends on your comfort level. Credit transactions offer an added level of protection – Zero Liability policies from MasterCard or VISA. That means if someone uses your card to make an unauthorized credit purchase, you are not liable if you report it within a specified timeframe. Debit transactions do offer protection, but if someone gets ahold of your card and uses your PIN to make a purchase, you may have more difficulty getting your money back.

Another thing to keep in mind; credit transactions are more profitable for banks. As a result, they may offer incentives to get you to make them, such as cash back for signature-based purchases or waivers on checking fees. So, there may be added incentives to choose “credit” at the checkout line.

So now that you know the difference, that debit or credit question at checkout just got a little easier. As for those other pressing questions – “Do you want fries with that?” — you’re on your own.

Related Links:

https://www.dnbfirst.com/index_2.php?page=Debit_Cards

Vince Liuzzi serves as Executive Vice President and Chief Banking Officer at DNB First.