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Earlier this year, we brought you the first six of twelve steps toward living a debt-free life.

The first step was to take stock of your debt by writing down exactly how much you owe to whom, plus information on payment amounts and interest rates. Put that information into a spreadsheet.

The second step was to assess your spending, and work hard on not incurring any more debt than you already have.

The third step was to call your credit card and loan companies and see if you could get your interest rates lowered!

The fourth step was to create an emergency fund so that unexpected expenses like car repairs or medical bills don't completely derail your finances.

The fifth step was organizing your finances by really keeping track of every expense during the course of the month — from that morning latte to utility bills. It’s critical that you know where your money is going so you can get more control over it.

The sixth step was  trimming your expenses by taking a look at the money you spend and figure out what you can cut — from subscriptions to take-out dinners. Put that money toward paying down your debt, instead.

Now, it's time for step seven!

It's normal in mid-summer for daytime temperatures to top 90 degrees, and the humidity can get downright painful. Start thinking cold thoughts! Specifically, envision snowballs!

No, don't worry, we are not suggesting that you start selling snowballs to raise extra money.

Instead, the "snowball" is a method of paying off debt. Here's how it works:

Choose the debt you’d like to pay down first. Financial expert Dave Ramsey suggests starting with your smallest debt amount first. But others suggest starting with the debt that carries the highest interest rate.

Either way, focus HARD on that debt and put as much extra cash as you can toward paying it off while continuing to pay the minimum amount on your other debts. Once you've paid down that first debt, put that first debt's monthly payment amount toward paying off the second debt on your list. It's like building a snowball!

Here's an example:

• Debt 1 is $950 with a minimum payment of $100.
• Debt 2 is $3,000 with a minimum payment of $200.
• Debt 3 is $5,000 with a minimum payment of $250.

First, pay off that $950 debt by throwing as much money as you can at it. If you pay $250 per month, you could get rid of it in about 4 months!

In your 5th month, start paying down the second debt faster by adding the $250 per month you were paying on the first debt to the minimum payment of the second debt. So, you'll be putting $450 toward that second debt every month. You'll have it paid off in no time!

Have questions? Did you know that our certified financial counselors are available to meet with you at no cost? We're dedicated to your financial well-being and want you to succeed. Setting up a meeting is easy - just visit our website, request a free consultation, and we'll be in touch soon!

If you would prefer to learn at your own pace, we have a resource for that too! Visit Banzai, our online adult and youth financial literacy program, to learn more about methods to pay off debt and other financial topics.

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