Much like January when many of us take the opportunity to get a bit fitter, eat a bit healthier or drink a little less, the weeks leading up to 5 April, and the start of the new tax year, are when many people decide to get their finances into shape.

Whether you’re making the most of your existing tax allowances before they’re gone or setting yourself a new goal, here are some top tips for getting financially fit this year.

Getting ready

Much like checking your gym pants still fit or your trainers are free from holes, the first thing to do is an honest appraisal of your finances. Do you know how much money you have sitting in cash in your bank account? It might seem odd, but more than half of British adults can’t confirm the amount of money in their bank account.

And with interest rates at historically low levels, keeping more money than you need to in cash could be harming your long-term financial outlook when you factor in the impact of inflation.

It’s a good idea to keep between three and six months’ outgoings in an easily accessible cash account for emergencies.

Do you have any debt – aside from your mortgage or long-term loans – that you could pay down? Putting extra money toward high interest debt will reduce the total amount of interest you have to pay in the long-term. A general rule of thumb is you are usually better off paying off your debts before investing.

It’s good to have a budget, and important to be realistic. Knowing how much you expect to spend each month on essentials – food, utilities and broadband for example – is just as important as having a realistic expectation of your discretionary spending such gym membership, meals out, and non-essential shopping.

Set a goal

Clear goals and timeframes are just as important for your finances as your fitness regime. The NHS Couch to 5k running app, promises to have you running 5k or for 30 minutes in nine weeks. When it comes to investing, we recommend investing for at least three years, but preferably longer.

Historical data shows that the longer you invest the higher the probability of a positive return, in fact, investing for 10 years increases your chances of a positive return to 94%.

Having a goal for your investments is helpful too. If your provider allows you to give your investment pot a name. It’s a slightly soft science, but the accepted wisdom is that people with a clear goal remain focused on the goal. Knowing your investment pot is intended to pay for university fees, or a second home in 15 years’ time, helps to keep you focused on the goal.

Develop a routine

The Couch to 5k sets out a three-times a week programme; regular runs help to increase fitness and stamina, but also help build good habits so that running becomes a part of your daily routine. Making regular contributions to your investments is no different.

Routine can also be especially helpful if the investment process is automated, for instance, by setting up a direct debit. This process of spreading your payments over time also has a second advantage – cushioning your losses if the market falls. This is known as pound cost averaging.

Be prepared for the unexpected

For those who have tried or completed the Couch to 5k you’ll be familiar with, what I consider, the infamous week five unexpected change of events. For four weeks, you’ve happily completed the same combination of running and walking three times a week. Your running confidence is up.

Then week five, without warning, the routine changes, and suddenly your third run of the week is “just run, for 20 minutes.” There’s most definitely a moment of shock, followed (for me at least) by 20 minutes of sweating and stress as I continually question if I can make it to the end. But you can.

This feeling is possibly not unlike the feeling some investors have when they experience their first market downturn. Market volatility is something to expect when investing, after all markets will go down as well as up. It’s important to remember that investing is a long-term activity and focusing only on the short-term has a habit of provoking an immediate response. If you can stay the course and ride out short term volatility in the market, you are likely to be better off in the long-term.

There’s no better time to start than now

When it comes to investing, the earlier you start the better. Starting early and investing for a longer period of time means your investments have greater potential to benefit from compound returns. Compounding is the theory that your returns, once reinvested, generate further returns.

If you were to start investing with a lump sum of £500 and made a monthly contribution of £100, assuming a monthly return rate of 0.2%, after nine years your investment will have grown to £12,687.68, of which nearly £1,400 – or 11% – will be compound returns.

There are free tools and calculators available to help you better understand the effect of compounding on your investments.

So, if you’re looking to get financially fit for the new tax year, remember to get yourself ready, set a goal (or two), develop a good investing habit, try to avoid the temptation to be distracted by unexpected short-term hiccups and start now.

Kat Mann is savings and investment specialist at Nutmeg