The result is often indecision, which, experts say, is the worst choice of all. Many people have substantial sums left in current accounts that pay little or no interest. People with big debts on credit cards or store cards can be paying as much as 30 per cent interest, without realising they could pay off the bills using money in deposit accounts earning just a few per cent.
Conflicting financial demands create another common reason to put off planning. Younger households in particular may have to prioritise their financial objectives. It may not be realistic to contribute to a pension, set aside money to move house or for school fees, increase short-term savings and invest in the stock markets. But there are ways to make existing funds stretch.
It is almost always possible to make money work harder. "Quite a lot of people have several thousand pounds in a bank account or even in a low paying building society account doing nothing," says Bina Abel, independent financial adviser at the Bradford and Bingley building society. "It could be working for them."
The first step towards creating a personal financial plan is to make a list of assets. This can turn up surprises. People in their twenties and thirties will usually find they have more liabilities than assets. Older householders might discover that they are worth more than they thought, especially if they have paid off a substantial part of the mortgage, or the value of their house has risen over the years.
Sometimes investors overlook other pots of money, such as insurance policies, small shareholdings, or funds with friendly societies or National Savings. Establishing exactly how much money there is and where it is is the key to making the most of it. Individually the returns on savings or investments might be poor but by bringing them together in a high-interest account or, in the case of shares, adding them to a tax-efficient plan such as a PEP or the forthcoming Individual Savings Account, they should improve.
"The most obvious starting point is to make a list of what you have," suggests Justin Modray, at Chase de Vere, financial advisers. "This includes your current account, PEPs and Tessas and shareholdings, not forgetting demutualisation shares. Once you have done that you can work out what it is worth; it is tedious, but once it is done, the hard work is over."
Then you need to look at outgoings. Budgeting is a worthwhile exercise even for people whose finances are stable; for anyone with debts, it is vital. Filling in a checklist (see left) is a handy way to see exactly where the money goes.
Once you have made a list you will spot areas where spending can be reduced. There are almost always ways to cut costs without affecting money for holidays, entertainment or leisure activities. Then you can go on to sort out your debts and make 1999 more prosperous.
Over the next five weeks we will be offering advice on how to sort out these key areas of your finances, including banking, debt, insurance and investments.
what are you worth?
Fill in a spending chart over a month. Carry a pocket book with you to record all your spending and always keep credit and debit card transaction slips. Add extra spending sections where they apply to you (for example, childcare, public transport costs).
Money coming in
Salary; other income (extra work, money from investments); other payments (benefits, pensions).
Mortgage/rent; council tax; loans; insurance; utility bills; regular savings; car expenses; credit cards; bank charges; food bills; other shopping; entertainment; clothes; magazines and papers; pets; other expenses (holidays, presents and so on).
Subtract your total spending from your total income to find out your shortfall or monthly surplus.