Cash Flow is the inflow and outflow of money.
Cash Flow planning helps to identify major future expenses (short-term, medium-term and long-term), thereby helping to plan the fund investment in an appropriate manner so that the required sum is available at the given period of time. 
Why is Cash Flow planning important?
Imagine a situation when you require funds but cannot withdraw any amount since the investments are either in locked-in products like FD’s or close-ended funds! This puts you in a tough situation. Hence, Cash-flow planning is very integral to any investment plan.
Business houses use cash flow planning to know their future financial layout and to take corrective steps to meet their finance requirements at various points in time. Similarly, in a family, the application of cash flow planning becomes as important to avoid potential emergencies.
Cash flow planning helps you to identify your inflow and how you should plan the outflow so that the future is taken care of.
How to plan?
Start with identifying the sources of income and the amount of expenditure. Income includes salary, bonus, maturity of investments, income from other sources, dividends, etc. Expense includes regular household expenses (stores, electricity, school fees, telephone etc.), loan repayments etc.
The next step is to make a list of the things you would like to do for the future e.g., child’s education, child’s marriage, buying a house, provision for retirement etc. Prioritize your future goals and set a time frame for achieving them.
Lastly, ensure to make provision for a contingency fund to take care of an emergency.
