It would be more natural for B to say "just relax" or "just calm down". Usually, "just settle down" is used when someone is agitated or angry. A: That man just insulted me. I'm mad! B: Just settle down. In your example, you could use "just settle down" - it makes sense too. But "just relax" seems more natural. Also, using "first" at the end is ok. But it's not necessary unless it's the first thing someone needs to do before they do something else.