If you find yourself receiving an inheritance, of course it is usually during an emotional loss, however you count yourself fortunate in some ways. Depending on the amount this could truly change your life and it can be overwhelming. This is when you take time and let it sink in. Try not to start spending until you have come up with a solid plan. Pick a time frame that you will wait before spending any of the money. Maybe even one to three months. Also, if you are skilled at managing your money, it is still important to step back, take a breather, and develop a financial plan. Below are a few good ways to successfully manage an inheritance.

Create a list of financial goals. This list is the big picture. This is a good time to bring in a financial advisor if you don’t already have one. This is also the time to do a cash-flow analysis to see how much money you may need now and in the future. This exercise also gives you a chance to address any bad financial habits that may have tripped you up in the past.

Fund an emergency account. This is a top priority. Some suggest keeping three to six months of living expenses in an emergency fund. A simple checking or savings account with your bank is fine. Before directing any of the money anywhere else, make sure your emergency account gets funded.

Pay down debt. It seems we have all had debt to deal with at some point in our lives. Maybe you have credit card debt or school loans or like most people, mortgage debt. Now is the time to focus on what kind of debt you have and the interest rate on that debt. If your interest rate is high, say over 5%, you should probably consider paying it off. But if it is a low rate mortgage for instance, and you are still relatively young with good employment prospects, you may be better off investing that money.

Retirement Accounts. The next item on the list is your retirement account(s). If you haven’t been contributing the max to your 401k or IRA, go ahead and do it now. You can also consider contributing to a Roth IRA which will shelter some of the money from taxes and allow it to earn tax-free. In almost all cases, it makes complete sense to maximize your retirement accounts if your cash flow allows it.

Have some fun. Some advisors suggest spending 5-10% on discretionary purchases. Go ahead and list this as one of your goals, and you can determine later if this fits with your other goals and if it’s really worth it. But don’t feel guilty about treating yourself to something you’ve been wanting.

Again, if you’ve received an inheritance, you have an opportunity to do things to build your financial situation long term. And if you use the above as guidance, you should be well on your way to a secure future.