An inheritance can be an incredible gift that can change your whole financial picture—if you make the right decisions. Experts suggest giving yourself a fair amount of time, several weeks to a few months, to rationally examine where investing an inheritance will most benefit you.

So take a step back from this new income, and ask yourself these five questions.

What Are My Broader Financial Goals?

Look at your big picture financial goals, and see where the money you’ve inherited can give you a leg up. Are you poised to invest, or do you need to address a more immediate concern?

Am I Prepared for an Emergency?

Being prepared for a catastrophic event is just smart. If you don’t have three to six months of income saved up for the inevitable rainy day, you should consider using some of an inheritance to cushion that protection. Emergencies are just debt waiting to happen.

Do You Have Any Significant Debt?

If you have debt, it only makes sense to use at least part of an inheritance to pay down that debt. Student loans often have high interest rates, making them one of the attractive debts to pay off quickly. The same goes with credit cards.

Mortgage debt is more complicated. Income tax brackets and mortgage interest rates need to be analyzed in order to determine whether paying off a mortgage is the best choice for using inheritance income.

Am I Set up for Retirement?

Contributing to tax-incentivized 401(k) or other retirement accounts is a wise decision. This investment will work for you in the long run.

Can I Afford to Have a Little Fun?

The answer to this question is probably yes. After satisfying other prudent matters, what better way to honor the loved one who left you an inheritance than by fulfilling a dream in their honor.

To learn more inheritance spending and saving, contact Blisk Financial Group today.