Community Broker News and Views

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.

 

Tax season is once again upon us. And while H&R block is reminding you and the rest of America to “get your billions back” by filing your taxes, you should be reminded of another important step to take this time of year – maximizing your retirement savings.

With concerns over the continued viability of Social Security benefits, in the years ahead, Americans will have to assume more responsibility for their retirement savings. Yet data released in a number of 2014 research studies indicates that as much as 30% of U.S. workers have no money set aside for retirement. And many who have saved, will likely not have enough.

Less taxing retirement savings.

Whether you have an established retirement savings program or have yet to get started, now – in the season of taxes – is the ideal time to think about building that all-important nest egg. You can start by following these helpful tips:

• Enroll in a plan. Does your employer offer a retirement plan, such as a 401(k) plan? If so, enroll in the plan as soon as you can. If you have to log a number of years of service before you become eligible or if your employer does not offer a plan, Uncle Sam has provided you with a smart alternative – Individual Retirement Accounts (IRAs). You can choose from a Roth or Traditional IRA. The option that’s best for you depends on whether you seek to have tax benefits today or in retirement. Your tax advisor can help you choose the option that meets your unique needs.

• Pay yourself with retirement savings. The best way to accumulate assets for your plan is to contribute to your plan early and often. With the power of compounding interest, early retirement savers can build savings quickly. You can arrange to have a certain percentage of your pay or fixed amount of money automatically saved for your retirement. As your income starts to rise, consider upping the percentage you contribute each pay period. You’ll be amazed at how quickly your savings will add up.

• Capitalize on employer matches. As part of their benefits packages, many employers offer matching contributions to retirement plan participants. If your company offers this benefit, be sure you contribute enough to capitalize on the full benefits of the match.

• Know your company’s vesting schedule. If your company contributes to your plan, you may have to wait a certain period of time before your retirement assets become fully available to you. So if you leave a company before that period of time, you could be leaving a lot of money on the table. Make sure you are familiar with your company’s vesting schedule before you make any moves.

• Leave it alone. As your retirement nest egg begins to amass, you may be tempted to access your funds for non-retirement purposes. Making early withdrawals will not only result in loss of principal and interest, but also could result in significant tax penalties.

• Get professional assistance. The money you save for retirement can be one of your biggest assets. While managing those assets, you will have to make many choices and decisions. It’s never a bad idea to sit down with a retirement specialist to navigate the choices available to you. At DNB First, we’d be happy to review your options and circumstances with you.

Make your retirement savings plan today.

As your preparing your taxes this season, take a moment to prepare for your retirement savings plan. You may not get billions back in retirement, but you’ll be in a good position to live a comfortable retirement. And that, America, is priceless.

Related Links:

http://www.huffingtonpost.com/2014/10/27/die-than-retire-poor_n_6042682.html

http://money.usnews.com/money/personal-finance/articles/2014/10/31/how-seriously-should-you-take-retirement-savings-calculators

http://www.nytimes.com/2015/02/25/upshot/obama-proposal-recognizes-how-retirement-saving-has-changed.html?_r=0&abt=0002&abg=0

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

 

Has this ever happened to you? You decide to try out a cozy new breakfast nook or to stop into a quaint little store. As you’re about to pay your bill or make a purchase, you reach for your wallet. Just as you pull out your trusted debit or credit card, the cashier stops you and says, “I’m sorry, we don’t take cards. We only accept cash.”

If you’re a card-carrying member of the highly popular electronic payment club, you may be thinking you’ve just entered an episode of the Twilight Zone.

Who doesn’t accept credit or debit cards today? Churches, doctors, even the school lunch lady now accept these types of payments. In fact, in 2013, purchases made with debit, credit, and prepaid cards topped $4 trillion, and were projected to increase even more in 2015.

Yet despite the popularity and growth in credit and debit card usage, many smaller businesses still don’t offer the flexibility to pay by card. These businesses see merchant card processing as an added expense. Why turn over a portion of sales revenue to a credit card processor when they can keep 100% by accepting cash only?

What these merchants may not realize is that by accepting card payments, they can actually generate additional revenue. There are significant benefits to giving customers the benefit of paying by card, including:

• Increased sales. Research has shown that consumers spend an average of 20% more when they pay by card versus cash or check.
• Improved cash flow. Businesses that accept cards have improved cash flow, since they don’t have to wait for funds to clear as they would with a check.
• Access to more customers. By accepting all payment forms, merchants are likely to attract more customers and not turn away those who prefer to pay by card. They may also be able to reach customers outside their geographic area through telephone or Web sales.
• Increased customer loyalty. Customers who accept debit and credit card    payments may also accept gift cards, which increase repeat business and customer loyalty.

The bottom line is that accepting credit and debit cards helps merchants build the bottom line – and open more doors. And that is exactly what the owners of that cozy little breakfast nook and quaint gift shop want.

 

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

A gourmet kitchen. Basement playroom for the kids. Bright sunroom. New windows. There are a lot of ways to improve your home and truly make it your castle. So it’s no wonder that the home improvement industry in America is booming with more than $300 billion in home improvement sales in 2014 and even more projected in the coming year.

If you’re thinking about having some work done on your home, consider getting some additional work on a part of your home that’s just as important – your mortgage.

It may not sound as exciting as a gourmet kitchen or a cozy mancave, but a “mortgage makeover” can offer you significant benefits, including:

• A lower rate. Mortgage rates may not be as low as they were a few years ago, but they still are very attractive. Refinancing your mortgage to a lower rate can lower your monthly payments and the amount of mortgage interest you pay over time.
• A shorter term. With rates still low, you may be able to lower the term of your mortgage from 30 years to 15 years without significantly increasing your monthly payments.
• Home improvement money. Many people refinance their mortgages and take cash out to pay for home improvements. This allows them to take advantage of potential tax benefits (consult your tax advisor).
• Debt or loan consolidation. Another good reason to refinance is to consolidate debt. A common example is refinancing to combine a home equity loan or line (second mortgage) with a first mortgage.
• Conversion to a fixed-rate mortgage. If you have an adjustable-rate mortgage, you may want to consider refinancing to a fixed-rate mortgage, which will provide the peace of mind of fixed monthly payments over the life of the loan.

Make your refinance move wisely.

Keep in mind that refinancing doesn’t make sense for everyone. Before you make your decision, you’ll need to hammer out a number of factors – interest rates, your credit situation, the amount of equity you have in your home, and how long you plan to stay in the home, etc. Before you proceed, it’s important to talk to a lender who will review your unique situation and recommend the option that’s best for you. After all, a makeover is supposed to make you feel your best. And nothing feels better than knowing you made a smart move.

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

It’s hard to believe that the international reality TV series, Survivor, is about to embark on its 30^th season. For those unfamiliar with this popular television series, the show brings up to 20 contestants into the wilderness to compete for cash and prizes. The contestants must brave the elements, build alliances with others, and overcome unexpected challenges and twists.

Though clearly not as extreme, the concept of Survivor is a lot like owning and operating a small company in today’s highly competitive business environment. Today’s business owners must navigate a host of obstacles in the coming year, including:

• Going social. Technology has changed the way businesses communicate with their customers and prospects. Business owners will need to know how to utilize social, email, and online marketing to stay in touch with their customers, manage their brand reputation, and cost-effectively reach new prospects and markets. Those who can keep up with the technological curve will have a competitive advantage.

• Obtaining financing. Having access to credit has been an ongoing challenge for business owners and may continue in 2015. This is especially true for newer and less established businesses. As such, it’s important that business owners work with banks that are dedicated to small business lending, including SBA loans.

• Protecting data. The growing sophistication of cyber attacks will be an ongoing and serious concern for businesses in 2015 and beyond. Companies will need to dedicate resources to ensuring they have the systems and procedures in place to protect their business and their customers.

• Managing health care. Changes in health care laws will be one of the biggest challenges that smaller businesses will face in the coming year. Companies must balance cost containment with the benefit of having quality insurance to attract and retain top talent.

• Maximizing time. Running a business has never been a 9-to-5 job nor will it continue to be. Business owners will need to find cost-effective ways to outsource the administrative tasks involved with running a business to focus on revenue-generating activities. This includes outsourcing time-consuming functions, such as payroll processing.

Though these challenges are difficult, business owners have a valuable advantage over Survivor contestants (beyond being fully clothed): they can plan for them and form alliances with organizations that can help solve them, such as a strong financial institution. If a business owner is not getting that level of cooperation and understanding with their business bank, it may be time for a change. Or as they say in Survivor-land — time to “vote them off the island.”

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

 

“Retirement means no pressure, no stress, no heartache…unless you play golf.” – Gene Perret

Retirement. You can ask 10 different people how they would like to live out this important time in their lives and get 10 different answers. Some see it as an opportunity to travel around the country or the world. Others are driven to use the extra time to work on their golf games.

Though people have different ideas about how they want to live out retirement, they actually share very common concerns on how to prepare for it. Here are the top 5 challenges of today’s retirement planners:

1. Will I outlive my financial resources? The good news is that people are living longer and healthier lives. In fact, the average life expectancy in the United States is 80.1 years. While that’s great news, it does pose a burning question for today’s savers: will they run out of money?

2. Can I obtain and afford quality health care insurance? Health insurance is a concern for many people – even while they are working – so it’s not surprising that potential retirees worry about how they afford it when they cease working.

3. Will Social Security and Medicare be there for me during my remaining years? Ensuring these entitlements remain available is one of the biggest concerns the United States faces. And with nearly 10,000 baby boomers approaching retirement, the future of these benefits will be greatly challenged. The Social Security Administration (SSA) Retirement Estimator get help you get a sense of the benefits available to you based on your earnings.  

4. Will I be able to maintain my standard of living with the financial resources available to me? A comfortable retirement is the dream of every worker. However, in order to achieve that, one must ensure they have sufficient assets and retirement income to support the lifestyle they envision. 

5. How can I protect my financial resources from the effects of inflation over a 20- to 30-year retirement period? It’s no secret that the value of a dollar is vastly different than it was 20 years ago today. That’s why so many retirement savers are worried about the type of lifestyle their savings will be able to provide 20 years into the future when things will cost even more.

There’s little question that these are very real challenges. The answers to them, of course, varies by individual. There is, however, one common solution to help those planning for retirement – tapping the assistance of a professional firm.

 A retirement planning firm has the expertise and resources to help review your situation and navigate the plethora of options available to you. Learn more about how to choose a firm. You may also want to talk to the professionals at DNB First.

It may require a little more work on your part to find the right retirement planning firm today, but that little extra work now can lead to a comfortable life of leisure in retirement. We can all agree on the benefits of that.

Related Articles:

 http://money.cnn.com/retirement/guide/insurance_health.moneymag/index4.htm

 http://www.ssa.gov/retire2/

http://money.cnn.com/magazines/moneymag/money101/lesson13/

A new year of promise has arrived – the time to set personal goals, such as getting in shape. Those of us who have ventured into this territory know that getting fit is no easy task, particularly as we grow older.

But there is an easy way to get fit without any heavy lifting. It doesn’t even require you to plug in that treadmill or ever break a sweat.

It’s called getting financially fit.

And whether you’re just starting out in your financial life or nearing retirement, you can gain greater control of your money by following these simple exercises:

Set your financial goals for the year. Are you looking to reduce debt, build emergency savings, or set aside more for retirement? Determining and prioritizing your goals beforehand will help guide your financial decisions throughout the year.

Track your spending. The best way to take control of your money is to understand where your money is going. You should track fixed expenses, such as your rent or mortgage and car payment, as well as other expenses, including food, entertainment, gas, etc. You can utilize financial management programs or you can do it the old fashioned way – with pen and paper.

Utilize online and mobile banking. With these convenient banking services, you can pay bills and track your spending quickly and easily. You can set bill payment reminders and pay them automatically to ensure your bills are always paid on time. You can also arrange to have funds automatically transferred to your savings or investment accounts to put your savings on autopilot.

Review your insurance coverage. Though it’s often overlooked, insurance is a vital part of your financial plan. Review your insurance coverage to ensure you have adequate protection and that you are taking advantage of all the discounts available to you, such as multi-policy discounts.

Consolidate debt. Do you have left over holiday and other high-interest debt? You can reduce debt by consolidating your funds to a lower-interest option, such as a home equity line or loan. DNB First has a great rate on a home equity loan. Another way to reduce debt is to pay more than the minimum amount due on credit cards and other debt.

Review your mortgage. Mortgage rates are expected to rise at some point in 2015, so if you’ve been thinking about refinancing, now may be the right time. There are many good reasons to refinance, including reducing your payment, shortening the term of your mortgage, or eliminating private mortgage insurance if you put less than 20% down on your home when you bought it.

Meet with a financial advisor. When it comes to something as important as your financial future, it’s critical that you make informed decisions and understand all the investment options available to you. An experienced financial advisor will review your investment performance and objectives and help you make the right choices for your situation.

These are just a few easy exercises to help you get financially fit in 2015. If you follow this simple regiment, you can shed excess debt and be in great financial shape by the start of the next year. You can do it; no sweat.

During this holiday season of giving, I’m reminded of a quote from former 1960s- 1970s tennis champion, Arthur Ashe. He said, “From what we get, we can make a living; what we give, however, makes a life.”

What better time of year then to recognize and support the local organizations that selflessly give back to our communities through all seasons?

One such organization is Handi-Crafters, Inc. Founded in 1961, Handi-Crafters is one of Southeastern Pennsylvania’s largest providers of employment and support services programs for the disabled. Through partnerships with local employers, the organization provides job opportunities for the disabled in production, assembly, and packaging. By offering meaningful work, independent living, and retirement opportunities, Handi-Crafters empowers individuals with disabilities to reach their fullest potential. And those who have worked with Handi-Crafters know that the organization doesn’t just enhance the lives of individuals with disabilities, but also those who have the privilege of employing them.

Helping non-profits spread the wealth.

As a community bank, DNB First is committed to helping local organizations like Handi-Crafters continue to carry out their missions. Beyond providing financial and volunteer support to these organizations, the Bank also provides a crucial offering – helping these organizations manage their endowments.

Through DNB First Wealth Management, we are proud to help nearly a dozen non-profit organizations manage the funds they need to operate – for years to come. Experienced advisors work closely with these organizations to provide investment solutions that maximize funds, lessen risk, and reduce fees. Additionally, as a way of giving back to these organizations, the Bank offers generous discounts on investment fees.

Since 2006, DNB First has been proud to manage the endowment funds for Handi-Crafters. It’s just one small way we can help support their craft of making our communities stronger, and show that the best gifts in life come in different packages.

Learn more about Handi-crafters.org

Learn more about DNB Wealth Management

 

 

Every small business is unique, right? Yet, why is it that every business owner seems to share the same challenge? No matter how successful their companies are, today’s business owners seem to be in short supply of one vital resource – time.

All those day-to-day administrative tasks involved with running a business have left business owners little time to work on what’s most important – growing sales and revenue.

One of the biggest administrative culprits? Payroll. Between calculating pay, filing taxes, and managing deductions, payroll can be one of the most time-consuming tasks for a business owner. That’s especially true at year-end with bonuses and other compensation paid, and distributions made to retirement plans.

So, what are time-strapped business owners to do? One solution that’s become increasingly effective is to outsource payroll. By doing so business owners can reduce the time they spend on payroll from hours to minutes.

Some of the benefits include:

• Cost-savings. Depending on the complexity of a company’s payroll, it may be more cost-effective to outsource the function, freeing up the business owner and staff to focus on the revenue-generating aspects of the business.
• Tax expertise. Tax laws are always changing. By employing an experienced payroll company, a business owner can ensure the company remains in compliance.
• Penalty avoidance. Given the complexity of some compensation structures, it’s not uncommon for business owners or staff to make mistakes or miss filing deadlines when processing payroll. Mistakes can be costly, particularly when they lead to fines.
• Convenience. Most payroll companies allow you to submit payroll data online or by phone.

 So, while paying an outside vendor for payroll processing may cost business owners a few extra dollars, they will get a valuable return on their investment: more time. And that is money well spent.

Related Links:

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

http://www.entrepreneur.com/article/47340