Change your financial future with this one money hack


Add your earnings up over the course of your lifetime, and you might be surprised at just how big that number gets. The average liberal arts major, for example, will earn $2.1 million over the course of their working life, while education workers with college degrees will make around $1.8 million and those in computer and math fields will earn about $2.9 million, according to an American Community Survey Brief.

Yet, even with millions in lifetime earnings, Americans age 55 to 64 had, on average, just $104,000 in retirement savings according to a 2015 analysis. Obviously, there's plenty to spend your money on over the years like raising kids and paying for housing. But you owe it to yourself to sock away as much as you can, so you aren't stuck with empty pockets at the finish line.

In other words, at least some of the hours you spend working every day need to be directed toward paying for your future — and nothing else: "Most people work less than one hour a week for themselves. And that's not nearly enough," as self-made millionaire David Bach told CNBC.

Here's how to change your financial fate, using just one theoretical hour per day.

Start with a little math ...

Bach recommends working at least an hour a day for yourself and if you make this a habit, you can achieve important financial goals and get on the fast-track to success: "To figure out how many hours you worked for yourself last week, you first need to ask yourself how much money you saved last week," Bach advises. "If your answer is zero, then you worked zero hours for yourself last week."

To figure out how much you're saving, fill in the blanks below:

In a typical week, I work ____ hours.
I earn $____ an hour (before taxes).
In a typical week, I put aside $____ for retirement.
So in a typical week, I work ____ hours for myself.

Not sure of your hourly salary? Take your annual salary and divide by the number of weeks you worked last year; then divide by the hours you work per week.

Then, to determine what you're saving, figure out how much of your money is funneled into a retirement account each year — by checking with HR or with your 401(k) provider — plus any funds that go into an IRA or other savings. Divide that by your total weeks worked, as well. Your savings divided by the number of weeks you worked is how much you "pay yourself" each week.

Lastly, divide the dollar amount you save per week by your hourly rate, to come up with how many hours a week you "work for yourself."

... then put your money to work.

Most people work around 261 days a year, based on average working days. If you set aside $20 a day for these 261 days, you'd end up with $5,220 in one year, $26,100 in five years, and $52,200 in 10 years — and that's if you never increased your income at all. The more you earn, the more you save and the more you can do with your hour of wages that you reserve just for you.

Working an hour a day for yourself can enable you to do lots of great things with the cash you're setting aside. You could:

Almost max out an IRA: Contribution limits to this tax-advantaged retirement account are $5,500 annually as of 2017. If you invest $5,220 a year in a traditional IRA starting at age 25 and never increase your contributions, you'd retire at 65 with nearly $1 million post-tax, according to a Bankrate IRA calculator

• Pay off a credit card: Average credit card debt for people under 35 is $5,808. If you pay $435 a month the amount you'd have by working an hour a day for yourself towards a credit card with an interest rate of 18%, you'd pay off your balance in just over a year and would save $2,800 in interest payments compared with if you paid a minimum payment of just $20 a month.

Buy a house: The median home price for first time buyers from 2010 to 2013 was around $140,327, according to Zillow. Ideally, you'll have 20% to put down on a first home, so this would mean a down payment of around $28,000. You'll take just over five years to save up enough for that down payment if you're working an hour a day for yourself on a $40,000 salary.

Whatever your financial goals, it's absolutely worth it to figuratively set aside an hour a day of your labor to accomplish them. Start today.

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