15 Financial Rules to Live By if You Want to Become a Millionaire

Becoming a millionaire may seem like a lofty goal. But the good news is, it's actually one that is within reach for most people. The key is to follow a few simple money rules if you want to build a seven-figure nest egg.

So how can you achieve millionaire status? Just follow these 15 rules throughout your life.

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If you want to reach millionaire status, you need to spend purposefully and wisely so you have plenty of money to save. Living on a budget is the key to consistently spending responsibly over time.

There are different kinds of budgets, so you can adopt one that works well for your spending style. But be sure you prioritize saving and are consistent in sticking to your budget if you want to become a millionaire.

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No matter how much you earn, you can't become a millionaire if you're spending all the money that you're making. If you want to build wealth, you need to live below your means.

This typically means keeping your spending to no more than 80% of your income -- and perhaps less, depending how quickly you hope to become a millionaire.

If you want to become a millionaire, you can't afford to live like one when you're trying to build your nest egg.

Buying fancy homes, lavish jewelry, expensive cars, and other luxury items is likely to prevent you from actually become a millionaire since you'll be spending money on possessions instead of wealth-building assets.

If you want to become rich, avoid these trappings and use your money wisely to improve your long-term financial situation.

When you're aiming to keep your spending below your income, it's a lot easier to make a sacrifice once than it is to deprive yourself of spending on things you enjoy for years to come.

In other words, you'll do a lot better to buy a less expensive house and car than try to save money by never eating out or giving up your daily latte.

If you keep fixed expenses low, you'll have more money to save without continually living a life of deprivation.

Debt can destroy your efforts to become a millionaire.

If you are paying a lot of credit card interest or, worse, you've taken out payday loans, you're going to tie up so much of your money that it will be all but impossible to save enough to amass a million-dollar nest egg.

Avoid taking on this type of debt, which impairs your financial flexibility and makes it harder to live within your means in the future.

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Although high-interest debt isn't good, borrowing in itself isn't inherently bad. In fact, debt can actually be a tool that helps you build wealth and increases the chances of becoming a millionaire.

The key is to use debt responsibly.

Borrowing to start a business or earn a degree and improve your earning potential could be smart moves. So could taking out a low-interest mortgage so you can free up more of your money to invest rather than paying cash for a house.

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The sooner you start saving money, the easier it will be to become a millionaire. That's because your money can work for you and you can benefit from the power of compound growth.

If you start saving when you're 20, you'll have many more years of investing to build your $1 million nest egg than if you start saving when you're 40.

The money you invest will earn returns, which can be reinvested and earn money itself. Over many years, the money you originally invested will earn a lot of money on its own even without any further contributions from you. This compound growth can make it much easier to build wealth.

If you want to become a millionaire, it's important you know exactly how much money to save to make that happen by your target date.

It's easier to break that big goal of saving $1 million into small goals so you'll know how much to set aside each month and each year.

Investor.gov has a calculator you can use that will show you exactly how much you need to invest over time to become a millionaire by your desired date.

The government can actually help you become a millionaire if you take advantage of tax benefits provided for savers.

You can use tax-advantaged accounts such as 401(k) or IRAs to save for retirement with pre-tax dollars. Or you can use Roth accounts if you want to be able to withdraw money tax-free as a retiree.

Just be aware these accounts come with restrictions on when you can make withdrawals. If your aim is to become a millionaire well before the traditional retirement age and live off your wealth, you may need to use other accounts as well.

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It's really difficult to save $1 million without investing. That's because you won't earn the type of returns that help your wealth grow quickly.

Traditional or high-yield savings accounts often provide a very low return, which may not even be enough to keep pace with inflation. Putting some of your money into stocks is key to consistently earning more reasonable returns over time that make millionaire status achievable even without a huge income.

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Although you need to invest in some riskier assets, such as stocks, in order to maximize your returns, you don't want to take on too much risk. That means you need to devise an asset-allocation strategy appropriate for your age and investing timeline.

The more risk you're willing to take, the higher the potential returns but the greater the chance of losses -- at least in the short term.

If you are a younger investor with time to bounce back, you can have a very different asset allocation than an older person close to retirement who doesn't have the time to wait out a market downturn.

You'll also want to make sure your portfolio is diversified, which means investing in a mix of different assets so you don't put all your eggs in one basket.

It's important to understand what assets you're investing in and how they are likely to make you money over time.

You don't want to invest in something you don't fully understand because it's too hard to assess whether the asset is a sound one, so you increase your risk.

If you're willing to take the time to learn, investing in individual stocks can have a big payoff. But if you want a simpler approach, consider exchange-traded funds (ETFs), which are easier to learn about and which reduce your risk by providing instant diversification.

Chasing short-term profits is a really risky investing strategy. If something goes wrong, you could be stuck with an investment that can't withstand a downturn.

It's far better to buy solid investments that you want to hold onto for the long term. That way, if you don't happen to time your investments perfectly (which is really hard to do), you should still make money over time because your assets will be able to recover and grow.

A market crash shouldn't be something to fear, but instead should be looked upon as an opportunity.

As long as your investing thesis doesn't change, you can keep your current investment mix to wait for recovery. And you can take the opportunity to buy more assets that are on sale because of the crash but that have solid long-term potential.

As Warren Buffett advised, it's best to be greedy when others are fearful and fearful when others are greedy.

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Finally, if you want to become a millionaire, it's important you avoid scams and schemes that promise to get you there quickly or effortlessly.

While almost anyone can become a millionaire, it takes time, diligence, and responsible spending and investing. Trying to take shortcuts is only likely to make things harder.

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