Congratulations! I know how it feels...my banana plant (his name is Rupert) just sprouted a pup a few weeks ago.

Other members could probably give you more detailed advice, but here's what I know: Wait until the pup is at least 1 ft. tall before you cut it off. You want it to be nice and strong, and capable of withstanding transplant. Seeing as how you're in Massachusetts, I would wait until spring or summer, when it can make a quick comeback. Second, when you go to make the cut, do it with a strong, sharp-ish, preferably sterile garden trowel. Make sure you cut at an angle into the mother plant in order to get enough roots. 30 degrees seems to be adequate. Once you've made the first cut, cut in a circle around the baby (not too close), make one final scoop, and pop him right out of the ground. It's just that easy. From there, you can plant the baby in its own pot. You may wish to keep it out of DIRECT sunlight for the first week or two, just to be safe. Good luck!