The Financial Flank

The first step is understanding your income. Military pay can be complicated. You need to verify that your base pay is accurate, confirm that your entitlements are accounted for, and understand your Basic Housing Allowance (BAH). OFF offers a module for selecting appropriate housing and understanding BAH. Utilize MyPay to access your Leave/Earning Statement. If something is wrong with your pay, let your leadership know! 

Ensure the accuracy of your budget before starting the debt repayment process. Create a comprehensive budget that accounts for all income and expenses, ensuring that your outflows do not exceed your inflows. Utilize the "OFF Budgeting Tool" or contact a coach at OFF for assistance in creating a budget that covers all expenses.

Categorize your expenses as necessary or unnecessary. For necessary expenses, strive for the best value and rates. Identify and eliminate unnecessary expenses to increase your cash flow. Short-term sacrifices in step three will lead to long-term success in your journey. An expanded module on this step is found here. 

Calculate scores for our individual debts. 

1. List each debt including outstanding balance, interest rate, and monthly payment amount. 

2. We assign a weight of 50% to the balance; 30% to the interest rate; and 20% to the monthly payment. 

3. Calculate Debt Score using OFF's Debt Score Calculator. List each score next to each debt.

4. Once all scores are calculated; we rank them from lowest to highest. 

Implement the "Financial Flank" by making minimum payments on all debts except the one with the lowest debt score. Allocate any remaining cash towards that debt to accelerate its repayment. Repeat this process monthly until the debt is fully paid off.

During Step Six, we start to really gain momentum. In this step, we attack our debt, one by one. This process continues until our debt is paid off. Chances are during this process you will PCS, reenlist, or receive a tax refund. All three of those events typically include lump sums of cash that will help you pay off debt quicker.