Cash Flow Index Method
Clear the debts that tie up the most cash per dollar owed.
How it works
The Cash Flow Index (CFI) of a debt is its balance divided by its minimum payment. A low CFI means the debt demands a lot of monthly cash relative to how much you actually owe — it is "inefficient" debt.
This method pays off the lowest-CFI debt first, because eliminating it releases the most monthly cash flow per dollar of balance you clear. That freed cash then accelerates the rest of your plan.
CFI is popular in cash-flow-focused financial coaching because it optimizes for breathing room in your monthly budget rather than for raw interest.
Pros and cons
Pros
- Maximizes freed monthly cash flow per dollar
- Great when budget is tight
- Simple ratio to calculate
Cons
- Can ignore interest rate entirely
- May not minimize total interest paid
Who it's best for
The Cash Flow Index is best for people whose top priority is loosening a tight monthly budget as fast as possible.
The only way to know if this is the fastest, cheapest plan for your debts is to run the numbers. The calculator compares this method against five others on your actual balances and rates.
Compare other methods
Debt Snowball
Pay the smallest balance first to build unstoppable momentum.
Debt Avalanche
Pay the highest interest rate first to pay the least total interest.
Smart Cascade
Free up cash flow fastest by blending payoff speed with interest.
Highest Payment
Eliminate your biggest required payment first for instant relief.
Interest Cost
Stop the biggest dollar leak first (balance × APR).