A SAVVY saver who makes $50,000 a YEAR and could retire in her 30s has revealed her four big tips for getting your finances in order.
Money blogger Nicole Victoria, based in the US, took to TikTok under her handle @nobudgetbabe to share her money hacks, from building up an emergency fund to investing cash.
She claims she went from racking up $40,000 dollars in debt to making $50,000 a year by following a number of savvy money tricks.
Nicole claims she became a millionaire at 30-years-old, and is looking to retire before she hits 40.
In a separate video she has posted on TikTok, she says she has enough money invested so she and her husband can retire early and “live frugally” for the rest of their lives.
She says between them, they make $85,000 a year, but didn’t disclose the total value of savings she has in her bank currently for their early retirement.
But you’d need a pot worth £625,000 (over $825,000) to live on £25,000 (over $33,600) according to investment management firm Fidelity International, in order to retire early.
Her top money saving tips racked up 45.2k likes on TikTok with hundreds of people sharing and commenting on her post.
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One fan said: “As someone in their 20s I feel like I’m getting ahead of the game watching this.”
While another said: “I’ve already done all the steps except 4 on my own. Let’s go!”
Here’s Nicole’s tips to putting more cash in your bank.
Build an emergency fund
Nicole’s first tip was to start building up an emergency fund – which is a pot of savings you can use to cover your bills and the cost of essentials if you run into hard times.
For example, if you lose your job, you need to replace your car urgently or your boiler breaks down, you’ll be able to dip into these savings to help you get by.
She advised that you should have six to 12 months of savings to cover the “bare bones expenses”.
The Sun previously spoke to comparison website Savings Champion co-founder Anna Bowes to see how much you should be putting aside for your emergency fund.
Ms Bowes suggested having three months take home pay in your pot – so if your salary is £2,000 after tax each month, Bowes suggests having a rainy day fund of £6,000.
However, its important to clear any debts you may currently have before putting aside savings for a crisis.
That’s because you could be paying more in interest rate charges by not clearing your debt as quickly as possible.
Increase your credit score
Nicole said you should next start increasing your credit score.
This shows how well you’ve managed your borrowings over the last six years, and lenders use it to see how risky it would be to lend you money.
It can make it harder to get a mortgage or other loan if your score is low.
“When we make large purchases like a house or a car and we finance those purchases, we will pay thousands to tens of thousands of dollars more simply because we have lower credit,” she said.
To do increase yours, Nicole said to pay your bills on time and in full, and keep your use of credit in check.
This is because you will often have to pay a higher interest rate when you apply for credit if you have a low score.
That’s not the only way you can boost your credit score.
For example, your information may be “linked” to another person, such as you could have a joint card or bank account from a previous relationship still open.
Plus, you can get on the electoral register, proving who you are and where you live to creditors and making it easier to get your application approved.
Pay off your debt
Nicole advised her followers to next pay off their debts using the “avalanche” method.
This is where you pay off the minimum repayment balance on all of your debts, and then use remaining money to pay off the debt with the highest interest rate.
“Line up your debts from the highest to lowest interest rate and pay it off in that order,” she said.
However, Hargreaves Lansdown senior personal finance analyst Sarah Coles said you should initially try switching your debts to a credit card with a 0% balance transfer period.
These cards allow you to move over debts you already owe onto a new card, and you won’t pay interest on this amount for a set period.
However, she added you need to have a good credit score to do this.
“Work out for exactly how much you need to pay off each month to clear it all before any interest is charged again,” Sarah said.
If you use the avalanche method to tackle your debts, “you’ll free up more of the cash you were wasting in interest each month, which you can redirect to paying off your debt faster”, she added.
Invest your money
Finally, Nicole advised her followers to make their money “work harder” by investing.
“When you learn how to invest and make your money work for you, it is limitless,” she said.
There are a number of different ways to invest your money.
Nicole said investing in property, like buying a house and selling it on, or buying stocks in companies for example could see you make a return – although there is no guarantee that the value of either will go up so this can be a risky strategy.
Buying shares lets you own a stake and benefit from the success of some of the world’s biggest brands such as Apple, Starbucks and Google.
But Moneyfacts personal finance expert Rachel Springall warned that you should be careful when choosing to invest your money.
Investing is risky, as its not guaranteed that you’ll make a profit, and you could end up losing your money if the value of what you are investing in drops.
Rachel said that more “risk adverse” savers should beware of investing in stocks and shares.
“It is important that savers understand that past performance is not guaranteed for the future, so seeking advice and assessing their level of risk would be wise,” she said.
“It’s always wise to have some cash saved to fall back on in case of emergencies, such as in an easy access account, typically to cover at least three months of outgoings.”
Nicole said that she invests in order to boost her income – and that has gone towards funding her early retirement.
But as she says to save 50% of your income towards your retirement, this will most likely be unachievable for millions of families struggling to meet even basic costs as a cost of living crisis bites.
It comes as Citizens Advice estimates around 3.2million households are facing a financial crisis, either in the red or unable to cover the cost of essentials.