It’s that time of the year again. Yes, you’ve made your New Year resolutions to lose weight, stop smoking, et cetera. But what about your financial health? Have you thought about how to make your money work hard for you in 2012? Well, what better time to start than the first day of the year?

“I could say the usual like create a contingency fund, focus on financial goals or be debt free. But my strongest advice this year for investors is to get down to the basics and know the fundamentals of money management. Understand the assets that you have,” says certified financial planner Gaurav Mashruwala.

“Avoid the mistakes of the past,” adds Hemant Rustagi, CEO, Wiseinvest Advisors. “Don’t get swayed by short-term trends to make changes in your portfolio. If you’re investing in equities for a 15-year time frame, then ignore the short-term volatility.”

And Lovaii Navlakhi, managing director and chief financial planner, International Money Matters, says: “Don’t make sharp lump sum moves in and out of the market. Invest in a staggered but regular manner.”

Financial experts like Rustagi and Navlakhi can’t stop stressing on the need to identify financial goals before investing. “Investors often jump in without looking at their goals. If they’ve Rs 2 lakh to invest and an advisor says debt funds are doing well, they’ll invest in them. And invariably, this will be at the peak of the market,” says Rustagi.

He advises investors to “reassess their investment selection process” by identifying their short- and long-term goals — whether it’s Rs 20 lakh for their children’s education in three years or a Rs 1 crore retirement corpus in 20 years. There should be a separate portfolio for each goal. “Don’t get fearful but don’t get greedy either. If you make more than you envisaged, take out the profits,” adds Navlakhi.

What mistakes do investors commonly make? Well, Navlakhi says that typically, when investors make a bad investment, “they don’t want to sell at a loss”. Or they keep focusing attention on a particular investment (like a bad stock pick) “even though it may be a small proportion of the portfolio”. They also get swayed by how much their “neighbour made in gold or real estate”.

“And if some advisor keeps chasing them for long enough and they don’t know how to say no, they just succumb and invest because the person is persistent,” says Navlakhi.

Mashruwala says that most don’t know the basics like that they should maintain their IT returns for six years at least, and their salary slips and Form 16 for three years.

“I once asked a model, ‘Is your bank account joint or sole?’. And he said: ‘I’m still single.’,” recounts Mashruwala. And many believe that a salary account requires a sole signatory. “They’re satisfied if they have a nominee. But a nominee only comes in when you die. What happens if you’re alive and in hospital,” he says. Or they may have the right insurance policy, but they don’t know where to file a claim.

Clearly, there’s a lot to learn and do, and it’s time you made a start.