The end of the year is customarily a time when you sit back and take stock of things. If you're like most people, the result of all that soul-searching is usually a catalogue of promises you make to yourself to eat more fruit and vegetables, lose a stone or two, be nicer to your mother and - finally - get on top of your finances.
In the New Year, you decide, things will be different. You will save more and spend less (or at least spend a little more wisely). You will make sound investments and cut your losses on the ones that weren't. You will take only the most calculated risks, paying scant attention to the latest investment fads that are so captivating your friends.
But before you begin a do-it-yourself financial regimen, why not take some cues from the Financial Times Money Makeover series? Each week, we feature a person or family with a specific financial concern and try to help with expert advice.
In 2004 the Money Makeover series looked at various cases, including a 30-something Surrey husband and wife relocating to Canada to open a bed-and-breakfast business, a recent college graduate eager to buy his first flat in London and a retired Scottish couple hoping to set up a trust for the grandchildren's education.
In spite of the differing circumstances, however, independent financial advisers regularly featured in the series say that most participants - indeed, most people - have similar money troubles.
The most common problem, they say, is that many people do not have a will. "A will is one of the keystones of a sound financial plan," says Neil Bailey, a certified financial planner. It can help with estate planning, ensuring that the distribution of your estate is in line with your wishes. It can also help with inheritance tax planning - ensuring that the estate is distributed as tax-efficiently as possible.
"If you chose not to make a will," Bailey warns, "you - and your beneficiaries - will have to accept the government's rules of intestacy which may be neither tax-efficient nor in line with your wishes."
A similar problem, says Francis Klonowski, a certified financial planner, is that many people lack life assurance and critical illness cover. "We buy all sorts of insurance - house, motor - and yet there seems to be a natural aversion to insure something far more valuable: ourselves," he says.
Klonowski advises people to treat protection planning as a financial exercise. "You need to ask yourself: how much income or capital would be needed if you died - and by whom?" he says. "Now ask the same questions in the event of ill health or incapacity. The answers will be different at different life stages - for younger people it may be a question of being unable to work for long periods. For older people, it may be more about the possibility of ill health leading to the need for long-term care."
Another common problem cited by financial experts is high expectations for retirement coupled with inadequate savings for it. "With the bad news surrounding final salary schemes, it's easy to get despondent about retirement planning, but it is critical that people begin saving for it sooner rather than later," says Paul Greaves, a certified financial planner at Montgomery Charles.
Pension savings schemes are a good starting point because they offer benefits such as higher-rate tax relief and death benefits, Greaves says. "Basic rate taxpayers should consider Isas, which are almost as tax-efficient as pensions but a lot more flexible because you can get at your savings any time you want."
Alan Hardy, head of investments at Lloyds TSB Private Banking, adds that people should take better advantage of tax-free saving for retirement. "For people not prepared to take risks with the financial markets, National Savings Certificates can be a good investment," he says.
On the other hand, he says, for those who want exposure to the financial markets, an Isa may be the right choice. "Isas enable you to invest up to £7,000 a year in such investments as government bonds or company shares, either directly or via a unit trust or an Oeic. The benefit is that investments within an Isas are not subject to capital gains tax."
Speaking of exposure to financial markets, experts say that many people have misconceptions about how best to invest their money and, as a result, have high-risk or unbalanced investment portfolios.
Asset allocation, says Jonathan Davis, a certified financial planner at Professional Partnerships, is perhaps the most important factor in investment success because a properly balanced portfolio can help to protect you from severe market fluctuations. "I see many clients whose investments are generally inappropriate for their needs," he says. "I saw a soon-to-be retired lawyer who had seen his pension portfolio fall since 2000 because he was invested almost entirely in equity funds with little diversification - no fixed interest, commercial property or commodities."
Portfolios should ideally be a mix of property stocks, bonds, and cash. "The important requirement is to have a bespoke cohesive and focused portfolio that is appropriate to your objectives," says Davis.
Along those same lines, investors mustn't overlook the importance of monitoring the performance of their investments, says Jonathan Fry, an independent financial adviser. "Smart investors know that the only way to ensure they achieve their personal financial goals is to regularly review the performance and the suitability of their investments," he insists.
Investors should also stay abreast of changes to taxation laws, Fry notes. "The greatest threat to the preservation and accumulation of family wealth is likely to be the impact of taxation.
"Inheritance tax, for example, is increasingly a key issue - you may make excellent investment decisions, but you need to ensure these are not eroded by unnecessary taxation," he says.
