What will you do with the extra cash?

Posted at 5:54 PM, Feb 05, 2018
and last updated 2018-02-05 17:55:21-05

According to the Department of Treasury, 90% of people will see an increase in their take-home pay under the new federal tax law.

For many Americans this new tax reform means more money in their paychecks.

The amount will depend on your income, pay-period length and filing status.

When it comes to what to do with the extra cash, what makes the most financial sense?

7 Eyewitness News took that question to Todd O'Geen, M&T Bank Commercial Branch and Vice President. 

"When you get this increase, pretend like you never did and put it into a savings account," O'Geen said.

O'Geen suggests:

- Set up an emergency fund. "There was study done by the federal reserve back in 2017, that showed that 44% of Americans don't even have $400 set aside for an emergency," he said.

- Increase your 401K. The same study showed that many adults have no savings for retirement.

- Pay down debt. "Increase your monthly payments," O'Geen said.

- Open a 529 College Savings Plan.

Experts say the bottom line: if you can don't spend the money... save it.