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Your Bank > Education and Advice > CNB University

What Should You Do With Extra Cash?

M Schiller 2014
Michael Schiller, CFP® is Vice President - Financial Planning Officer and can be reached at or (585) 419-0670 x41958.

Whether it’s a bonus, a tax refund, or a large check from Aunt Sally, extra cash can make a difference in your finances. So it’s important to think carefully about how you’re going to use it. If you have credit card or other high-interest debt, paying it off might be a good move. But a little extra money could also give a nice boost to your retirement account. So how do you decide on the best way to use it?

First Things First

You never know when you’ll need money for expenses you didn’t plan on. So if you don’t already have an emergency fund, consider putting your extra cash toward saving three to six months’ worth of living expenses.

The Case for Investing

Investing your extra cash offers you the chance to acquire additional assets with the potential for growth. If you have a long investing time horizon and your investments perform well over the years, the money you invest could be worth significantly more in the future than your original investment. Having extra cash might also allow you to take advantage of a promising investment opportunity that you otherwise wouldn’t have the money to pursue.

Living with Less Debt 

Credit card interest rates can be high, and the interest you pay on your personal cards is generally not tax deductible. If you’re carrying a balance, using the extra cash to pay off or reduce your debt can be a smart move. As for personal loans, a good rule of thumb may be to pay down a loan charging nondeductible interest when the interest rate is higher than any potential returns you might earn on an investment. Another point to consider: While investment returns are unpredictable, paying off a debt will always mean more money in your pocket.

How CNB Can Help

Developing a plan that is right for you depends on your goals and unique financial and personal situation. Consider partnering with one of our Personal Bankers to help chart your path forward.