Getting financially fit is no different to getting physically fit. The steps are pretty similar but lots of people fail – particularly if they start on 1st January. Here’s what you need to do to increase your chances of succeeding.

Turn your dreams into goals – and write them down
“I want to run a marathon”. That’s not a goal – it’s a dream.

“I want to run the London Marathon in 2014”. Is that a goal? Well is it SMART? [reminder: SMART = Specific, Measurable, Achievable, Realistic, Time bound].  Tick, tick, tick, tick and tick. Confirmed: it is a goal.

Likewise in your finances, you have to know what you’re hoping to achieve (so you can measure progress) and by when (so you can tell if you’ve reached the finish line).

Get a plan
Breakdown your goals into manageable bite-sized chunks. You don’t start training for a marathon by running 26 miles. You start by building a solid foundation of fitness. It is the same with money. These simple steps should get you a long way there (wherever ‘there’ is for you):

• Spend less than you earn each month.
• Repeat each and every month.

A budget will help in this regard, but remember that budgeting is a forward planning exercise where you give every pound of future income a job. It is not an analysis of where you spend your income last month. That’s reconciliation. Until you have mastered these two steps you’ll struggle to make any progress.

Once you’ve got your budget sorted try these (in order):

• Pay off short term debt.
• Next, build up an emergency cash fund to cover unforeseen expenditure.
• Next, build up a savings fund to cover planned short term expenditure.

Then start investing – wisely. Just like wearing the correct kit is essential for training to prevent injury, discomfort or disaster the same is true of your money.

Utilise your ISA and pension allowances to protect your money from the tax man. Remember cash is NOT an investment. You have decent running shoes don’t you?

Protect yourself against disasters
Your financial future will depend on your future income. Protect it. When you go running at night you’ll wear a hi-visibility vest or wear a helmet on the bike, right? Insure yourself against loss of life, loss of income and loss of health.

Imagine not making it to the start line due to injury. Being forced to watch on the TV because you didn’t replace your sneakers or you twisted your ankle running in the dark. There’s always next year but you’ve missed your goal. And you’ll never be able to turn to turn the clock back.

So, you may not be planning to undertake a marathon, but most of us know that we could do with getting a bit fitter. So why not try out these three simple steps and see how you get on.