Receiving an unexpected sum of money is financially comforting, but it can also be logistically challenging. Stress can come along with the sudden wealth, and, often, the greater the amount you receive, the greater the stress that comes with it. You can ultimately threaten your new fortune or inheritance if you fail to manage it properly. When coming into wealth, many people begin to spend frivolously – we’ve all read about lottery winners going bankrupt – and although you may think that will never be you, the truth is that suddenly having a large sum of money to your name, regardless of the means surrounding the wealth, is a unique situation that the majority of us are unfamiliar with.

Whether you inherited money, had a business venture take off, received a significant raise or bonus at work, or won the lottery, here are five tips on how to approach and handle newly found wealth.

  1. Pay off your debt.

Although this may not be the glorifying way to spend your money you envisioned, it is undoubtedly the wisest first step to take. When you have money at your disposal, the most prudent way to use it is to pay off any debts you may have so that you can stop paying interest that only augments your debt balance. That being said, prioritize your high-interest debt first like credit card debt, personal loans, and private student loans. Depending on the amount of money you still have after that, consider paying off some or all of your debt with lower interest rates like a mortgage and federal student loans.

  1. Invest.

Strategically investing your funds can be the difference between having your money grow and support you for the rest of your life and finding yourself back to where you started in a mere few years. Investing your money is the smartest and most effective way to have your money work for you, and depending on the amount of funds you have to invest, you may be able to live off the return earlier in life than you expected. Be wise about the risk you assume when you invest your money – impulsive, risky investments can also erase wealth if you do not adequately allocate and balance your portfolio.

  1. Choose the right accounts to protect your money.

Although you will want to invest your newfound money, keep in mind that it is also wise to set aside some of the funds in the bank. Doing so allows you to keep the value of a certain portion of your money more stable, so you do not have to worry about market fluctuations and being forced to lock in losses if you find yourself with an unexpected need for cash amidst a market downturn. Savings accounts and certificates of deposit (CDs) earn more interest than your typical checking accounts and are two good vehicles to look into when deciding on where to park a chunk of your money.

  1. Keep taxes in mind.

Forgetting about taxes is one of the biggest mistakes you can make when you come into a large sum of money. Depending on how you come into your new funds, the government may require a large portion of the money in taxes. For example, inheritances can be taxable but the taxability can be complicated and depends on the value and type of inheritance. Make sure you are fully aware of your tax obligations to avoid any unwanted surprises and costly penalties. Consulting with your financial advisor, lawyer, and accountant is extremely important so you can know the specific amount of taxes you owe and if there are any tax-saving strategies you can implement.

  1. Do not completely change your lifestyle.

This is arguably one of the most important pieces of advice to uphold. Keep your lifestyle similar to what it was like before you came into further wealth. You do not want to get into the habit of unnecessary spending that results in a pile of new bills. Stick with your job, stay in your current living arrangement, and keep driving the same car. After you have first taken the steps listed above, you can evaluate your financial situation after a few months and put the necessary thought into any high-price-tag upgrades.

Final Points

The resounding take-home message if you find yourself with sudden, newfound wealth: Create a conscious plan to properly manage and use your funds to ensure you do not begin spending and wasting your money as quickly as you came into it. Keep in mind that this plan will be different for everyone and specific to you depending on where you are in life, how much money you assumed, and what your short- and long-term financial goals are. It’s advisable to first and foremost consult your financial advisor, so you feel confident in the steps you take toward effectively managing and implementing your new wealth.