As children, we spend time daydreaming about becoming princesses, pirates and lion tamers. As we become adults, our fantasies take a more realistic turn—we imagine getting married, finding the perfect job, maybe taking a yearly vacation. Some of us even daydream about inheriting a large sum of money—and that’s a dream that very possibly could come true.

According to a recent HSBC survey, American retirees expect to leave an average inheritance of nearly $177,000 to their loved ones. Additionally, many of these individuals plan to give money to their children even before they die. The same survey found that about 35 percent of U.S. adults have already received an average of $24,000 from a family member.

What will you do with your windfall? A survey conducted by Interest.com recently revealed that 42 percent of respondents intend to save any inheritance they receive for retirement, while 18 percent plan to pay off debts. Nine percent would buy a bigger house, while 3 percent would take a vacation. Finally, three percent would use the cash to buy jewelry or a nice car.

While a mansion or Maserati might be fun, neither will do much for your future. Instead, consider these options for creating financial security when spending your inheritance.  

• Sit on it – You’ve heard the stories about lottery winners who end up bankrupt due to bad financial decisions. While you might mentally spend your inheritance before the check even clears the bank, the best way to avoid a windfall blunder is to put off doing anything with the money for a while. When a month or two has past, you can then move on with a clear head.
• Create an emergency fund – If you don’t already have six to 12-months’ worth of living expenses set aside for unexpected emergencies, now is the time to do it. Take an appropriate amount of your inheritance and sock it away in an interest-bearing savings account and you won’t be pressed for cash in the event your spouse is laid off or your car’s transmission fails.
• Pay off your debts – Once you’ve prepared for a rainy day, move on to paying down debts. Start with those that have the highest interest rates (usually credit cards and car loans) and then move on to lower-interest debts like your mortgage and student loans. As your debts disappear, your cash flow improves—leaving you with more money to invest in your future, with or without an inheritance.
• Invest wisely – Now that you are prepared for disasters and have paid off your debts, you can use the rest of the inheritance to secure your financial future. This includes putting money towards your education, your children’s educations and into stocks, bonds and other investment vehicles.
• Have a little fun – While it makes sense to use your inheritance to create financial security, there’s no reason you can’t have a little fun as well. Once you’ve made your investments, use some of the income to make a few of your dreams come true. For example, if you invested $200,000 and earned a 5 percent return, you’d have $10,000 a year.

Whether you eventually inherit $1 million or $1,000, a financial planner or investment advisor can help you spend it wisely, changing your finances for the better forever.