Cash Flow Index (US)

The Cash Flow Index is a debt payoff ranking metric: balance divided by monthly payment. Lower scores free more monthly cash for every dollar you pay off. It is not a replacement for interest rate math. It is a way to decide which payoff actually changes your options the fastest.

Last reviewed: January 15, 2026.

Key takeaways

Lower Cash Flow Index scores free monthly cash faster.
It complements interest rate analysis, it does not replace it.
The right payoff order depends on your goals: breathing room vs. total cost.

The formula (plain English)

Cash Flow Index = balance / monthly payment.

If two debts have similar rates, the one with the lower Cash Flow Index usually frees more monthly cash when it is gone.

Why it matters

Most payoff advice ignores the one thing that changes behavior: monthly margin. When a debt disappears, the freed payment becomes your new cash flow. That cash is what enables other moves: savings, investing, tax prep, or a buffer that keeps you from taking high‑cost credit later.

When to prioritize Cash Flow Index

You are tight on monthly cash.
You need quick wins to build momentum.
Your interest rates are clustered (not wildly different).
You want a payoff plan that changes your options within a quarter, not a year.

When not to use it

A high‑rate debt is materially more expensive than the rest.
You are optimizing purely for total interest paid.
You have tax‑deductible debt with specific strategy considerations.

A simple example

Debt A: $8,000 balance, $400 payment → Cash Flow Index 20. Debt B: $12,000 balance, $300 payment → Cash Flow Index 40.

Paying off Debt A frees $400/month sooner. If you need monthly breathing room, Debt A is the better first move even if the interest rates are similar.