All individuals know the necessity of saving and investments for future, however, only 32% individuals have a financial plan. This statistic draws the attention to the fact that people are aware of the importance of creating a budget and at the same time do not take sufficient effort to do that. A financial plan can therefore be described as a roadmap to managing one’s resources in the most efficient way with a view of achieving financial objectives. Indeed, one risk of not having such a plan is that many people will continue to operate in a state of economic terminal velocity, and make arbitrary decisions that do not really respond to distant goals. 
 Developing an individual financial plan is important since it introduces the system and order to a person’s financial life. It also assists you will your time, your resources, and makes you ready for any contingencies that may come along the way. Whether one is planning to retire, saving for his/her child’s education or actively seeking to make a good investment, financial planning gives a structure to that particular endeavor. It turn mottoes into tangible procedures, include guidance and help you to gain a feeling of the ability to influence the future. At the end of this article, you will be aware of the importance of having a financial plan and on how it can improve your financial standing. 

 Development of a financial plan involves a critical step of defining goals and setting out the objective to be achieved. This involves the assessment of what you intend to get done in the short run and what has to be accomplished in the long run. For instance, may goals can range from the establishment of an emergency fund or for a particular contemplated vacation in the short-term while other goals may entail planning for retirement or for home purchase in the long-term. Thus, having officially spelled out these goals, a plan of financial defines direction and purpose as you make each financial decision. 
 A financial plan is where all the goals are defined and then there is a step-by-step plan on how to achieve all of them. This might involve creating an automatic savings plan, creating a debt pay off plan or starting an investment portfolio. It also implements the right sharing of a resource in a bid to work towards the accomplishment of a number of goals without jeopardizing the accomplishments of every goal. For example, it can coordinate the section of people’s disposable income towards paying bills and other pressing debts, saving for retirement, to mention but a few. 
 Also, a financial plan cannot be set and cast in stone since you always meet new challenges and you have new objectives to accomplish. That way, shareholders, stakeholders, employees, and other tactical partners can verify that the plan still works and update it as needed. Such events like marriage, having children, changes in working conditions, or; a gainful wind or any other factors should be considered. It helps in cases where you are bound to encounter such events and forces that positively or negatively affect your goals, and through reviewing your plan often, you are able to make right decisions that will steer you in the right direction as you chase your financial dreams. 
 

 Freedom from anxiety is the greatest advantage of making a financial plan. Research shows that people with financial plan are much more confident about achieving their pertinent financial targets than people without a financial plan. This confidence arises from the fact of a defined and certain structure that comes from a good plan. Being assured of a systematic laid down plan of action, and how to tackle or avoid hitches that might be along the way can reduce financial pressure and insecurity. 
 Exactly, a financial plan is a master plan of an individual where each and every aspect of their financial prospectus is considered starting from income, through expenses, savings and investing and ending on the insurance. Because each of these is covered in the plan, the expectations given the available resources and unforeseen occurrences are fully met.For example, an emergency fund within your plan makes sure you are prepared for the unplanned, which is essentially the title of this book, and insurance offers a safeguard against considerable misfortune. This comprehensive process helps you to have a good feeling that you do whatever you can to protect your financial life. 
 Moreover, the process of drawing up and implementing the financial plan promotes a preventive approach. So instead of responding to calamities in terms of the finance, you can actually prevent them from happening in the first place. Such an approach helps to create strong financial position, which means you would be able to address failures and other obstacles better and keep moving forward. A clear comprehension of the losses and gains of a financial scenario coupled with an effective financial working plan implies that you can go through your financial life cycle making the right choices. 
 

 Among the most vital aspects of any spending plan is risk management. It is impossible to predict most events in life and a good financial plan would encompass ways and means of safeguarding against such events. This sometimes constitutes making sure one’s insured in matters to do with health, lives, disability and properties. These insurance policies help when people need them and if one has a bad year, they do not have to stall financially. 
 Insurance is one of the most common method of risk management, but other methods are equally important in risk management commonly known as asset protection. This may involve the use of law having things like trusts or estate regulatory measures to shield your wealth from such things as creditors, legal cases, or the likes. It helps that your earned income is protected so that it may be passed on to your loved ones and generations to come. These are plans made considering all these factors and therefore develop a strong armor against any other risks that may be experienced. 
 Also, in a financial plan, risk management is another element that creates diversification in one’s investment. Diversification is used to invest in different classes, sectors and locations at once, so that some disappointing markets tend not to heavily influence general returns. It is a very efficient approach in terms of risk management, in addition, it opens new opportunities for development in different conditions of the market. Because of the consideration of both gain and fear and proper investment strategy, your financial plan makes a long-term domestic as well as overseas investment plan safe and sound. 
 

 An investment plan is a roadmap of how you want to spend your money, which goals you will focus on, how much risk is acceptable and how long it will take to achieve the set goalsLack of a plan also makes it difficult to make good investment decisions, and this might not augur well with the laid down target goals and objectives. An outstanding plan sets the expectation of how much to spend, where and how to modify it when the need arises. 
 The plan based on your whole financial situation, the income and expenditures, the loans, and the plans for the future. It thus helps you to develop an investment plan that fits into the various phases of your financial plan. For instance, during your early career, your plan of wealth creation may involve investing in high risks products while in later career as you approach retirement, the plan may be to invest in more conservative yet income yielding instruments. This strategic approach enables you to have the best investment portfolio that meet the changes in your surrounding environment. 
 Thirdly, it guides its implementer to mitigate on market unpredictability since operation and financing of its activities require corresponding funding. It offers a set of rules for investment discipline and helps follow them especially in the period of fluctuations. It enables an organization to avoid making periodic decisions based on emotions and instead makes decisions in response to market trends that are laid down by the set strategic plan. This might include moving up the asset allocation of your investment, investing at a time when the prices in the market are low, or adjusting your risk profiles. The adding of these elements in your financing plan will help you give clarity and assurance of your family members. 
 In addition, a financial plan can also include the methods of charitable giving and donating. This may comprise of creating charitable trusts, donation funds or contributing to the causes that interest the donor directly. Thus, through the inclusion of philanthropy in the financial plan one can use their money to make the difference both during their lifetime and after their death. This also helps to satisfy your wish to contribute back and, at the same time, offers a possibly tax-added advantage to your portfolio design. Finally, financial planning helps you have a perfect and well-articulated plan that defines how you want to live your life, what you need to bequeath to your family, and how your money will be spent to benefit society at large.

 In conclusion, the thoughts of managing your financial destiny with a customized financial plan are some of the most liberating ideas a person can have. A financial plan is comprehensive in that it should be able to guide you through the currents of life’s financial topography. This in a way coordinates every aspect of your financial life, which in turn brings definition and objective to it. The better your objectives are set, the more efficient strategies developed and used, the more frequently your plan is checked – the stronger your financial position and confidence will be. 
 However, a financial plan is not only about saving and making money, but it also encompasses preservation of what has been gained and the continuity of the financial plan even beyond one’s lifetime. From arranging an efficient kind of coverage that will protect your investments from clear and present dangers to developing an investment portfolio that will change according to the lifecycle that you are in, a financial plan fits the bill. It also touches on the aspect of financial security in terms of the emotional and psychological impacts, hence lowering anxiety. In conclusion, this effective financial plan makes it easier to make the best decisions and also protect the future of your family and leave legacy.