13 Steps to Take to Save $1 Million

Becoming a millionaire may seem like a fantasy, but it's within reach for most Americans even if your income is modest. You just need to know the steps that will get you to a cool million and follow them religiously for as long as it takes to achieve your goal.

If you're not sure how to get started, here are the 13 things you'll need to do to amass a seven-figure nest egg.

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While anyone can become a millionaire over time, not everyone can become one tomorrow or even next year.

Unless you win the lottery, inherit money, or marry into money, becoming a millionaire is a slow process that requires you to invest money over the years. And the sooner you want to become a millionaire, the more you'll have to save to do it.

To make sure you hit your milestone by your desired date, start by getting a rough idea of when that will be. If you want to retire with $1 million, for example, your goal may be to amass your pot of money by age 65.

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Once you know when you want to become a millionaire, it's easy to figure out the amount you need to save to do it. There are plenty of online calculators that can help -- you just need to estimate your rate of return and the number of years before you need your million.

While you can calculate how much per year you need to save to reach your target, it's easier to break down your goals on a monthly basis because that's how most people budget.

For most people, becoming a millionaire is going to require a combination of saving money and earning a reasonable return on investment.

After all, if you just let your cash pile up in the bank and don't earn interest on it, you would have to amass the full $1 million by contributing your own money to the account. But if you invest, the money you've already saved can work for you and help you earn more money so your account balance grows faster.

The right type of account will depend what you want to do with the money. If your goal is to be a retirement millionaire, you'll want to choose a tax-advantaged account such as an IRA or 401(k) so your money can be invested and grow tax free.

But if you just want to have a million by, say, age 40, a taxable brokerage account may be a better option since retirement accounts impose restrictions on withdrawals you may not want to deal with.

Most people can't save enough to amass $1 million if they just spend money freely without any limits.

A budget will help you to see whether you can hit your monthly savings goal and still cover other costs. Your contributions to your investment account should be considered a "must-pay" bill in your budget, along with rent and utilities and groceries, if you're serious about saving enough.

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The more you can devote to savings, the more easily you can amass $1 million.

You may need to make big (or small) budget cuts to save the necessary amount to reach your million-dollar goal by your target date. But even if you could save enough without sacrificing, you may decide that you'd rather reduce your spending on unnecessary purchases to hit your goal faster or to save more than $1 million.

The best way to identify areas where you're spending too much is to track your spending for a month. This gives you a baseline to start from when making your budget and makes it easy to see where you're going overboard and can make changes.

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You can make budget cuts to help you save, but there's only so much you can do to reduce spending. Depending on your current income and your timeline for saving $1 million, you simply may not be able to reduce your budget enough to achieve your objectives.

But you can increase your income by an unlimited amount. You may need to take courses to advance in your career, work a side gig, take on some overtime, or talk to your boss about how you can earn a salary boost. But taking some or all of these steps could make all the difference, both in terms of whether you can save $1 million and how fast you'll get there.

To be clear, not everyone needs to increase their earnings and, indeed, it is possible to become a millionaire on an average salary. But you may find boosting your intake is easier than slashing your spending, and it may be worth it for you to try so you can hit millionaire status on a shorter timeline or without so much sacrifice.

Going into debt can make it a lot harder to amass $1 million because you'll be spending some of your hard-earned income on interest instead of being able to save it.

To be clear, not all types of debt are bad debt to avoid. In fact, borrowing to buy a home or to go to school could actually help increase your net worth if you do so responsibly.

But borrowing for goods or services that don't help improve your net worth can be a big mistake and should be avoided in all but extreme emergencies if your goal is to become a millionaire.

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Your budget should include contributions to your investment account in the amount necessary to hit your $1 million target. But in addition to saving money on a regular basis, you'll maximize your chances of saving $1 million and will hit your goal faster if you invest "found" money.

That means if you get a raise, a cash gift, or another unexpected windfall, the money you receive should go right into your savings account.

The importance of making regular investments has been mentioned multiple times already, but the sad reality is that it can be really hard to be disciplined enough to choose to invest every single month.

The good news is there's no reason for you to force yourself to always make the responsible choice. Instead, set up an automated contribution to your retirement investment accounts that happens on payday.

You can easily do this if you have a workplace 401(k) plan, as contributions are taken out of your checks before you get them. But it's also possible to automate investments in an IRA or taxable brokerage account, too, either through your bank or broker.

Once you set up your contributions, you won't have to worry about investing the money or missing a month and jeopardizing your goal. The money will go where it needs to before you can spend it and without any effort on your part.

If your employer offers a 401(k) match, make sure you to contribute at least enough money to earn the full amount of it. Employer contributions are free money and can go a long way toward helping you hit your $1 million target. You don't want to miss out on them.

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Once you've moved your money into an investment account, you want it to earn returns to help you achieve your goal -- and you don't want to lose it.

Putting at least some of your money into the stock market is the best way to earn reasonable returns, but it does mean taking on some risk. The good news is it's possible to minimize the possibility of losses by investing for the long term and building a portfolio of diverse investments.

If you're not good at selecting individual stocks, putting your money into index funds could be the best approach and the lowest-risk way to get your money into equities. You can sometimes do better by buying shares of specific companies, though, but only if you're a patient investor willing to do the work to find rock-solid investments.

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It's important to monitor your progress toward your $1 million and make sure you're on track. Keeping abreast of how your investment account is growing can also help you stay motivated.

While you don't want to obsessively check your stock portfolio as this could increase the risk you'll sell at the wrong time based on emotion, you do want to check in around once a month or so to make sure you've deposited what you need to, that your portfolio is balanced, and that you're on schedule to hit your $1 million target by your deadline.

If you find you aren't, you may need to invest more, change your investment allocation, or make other shifts necessary to get back on track.

Different types of investment accounts, and different types of investment gains, are subject to different tax rules. The tax implications of your decisions can both affect how much of your million you get to keep and how quickly you hit your target.

If you invest in a taxable brokerage account, for example, you'll want to pay attention to when you sell assets to try to minimize short-term capital gains and maximize long-term ones. This will mean giving up less of your profits to the IRS, so you can hit your $1 million target sooner.

If you're investing for retirement, you'll need to decide if you'd prefer the up-front tax break that traditional 401(k) or IRAs provide or if you'd rather invest with after-tax funds but take tax-free withdrawals. If you opt for the former, you may have $1 million invested, but you won't have $1 million in buying power after the IRS takes its cut.

If you follow these 13 steps, you should hopefully be able to hit your $1 million target on schedule. It may require some sacrifice, but it's definitely worth doing to enjoy the financial security that comes with having a seven-figure nest egg.

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