Yesterday, the Bank of Canada announced a jumbo cut to the key interest rate, dropping it by half a percentage point to 3.75%. While this is great news for borrowers, it doesn't mean it’s time to go on a spending spree. When interest rates drop, people can see more savings on things like loans. And that extra dough might tempt some people to overdo it on investing or spending, or even over-borrowing. While this could help stimulate the economy, caution is key. “A rate cut shouldn’t be a reason for risky investing, or splurging on a new car or a fancy TV,” Ashish Dewan, investment strategist at Vanguard Canada told Peak Money. Despite the jumbo-ness of it all, it’s smart to keep a good chunk of money in your savings account for emergencies. And don’t hold your breath for another big cut at the next meeting in December; analysts are leaning towards a smaller, 25-basis point cut, while Dewan thinks we won't see any more cuts this year.