What starts off as $2,000 in credit-card debt balloons to $10,000. Then you take out a mortgage, and pop out some (very expensive) kids. Soon enough, you're in over your head.
Work that financial prudence muscle every day, every month, every year to get back in shape.
Every day: Record purchases
Keeping track of every dollar spent may seem like a hassle - every pack of gum? every trip to the gas station? - but with the range of high- and low-tech options, there's no excuse not to do it, says Kerry Taylor, the Vernon, B.C., writer behind the frugal-living blog squawkfox.com.
"Track your spending on a spreadsheet. Get a darn notepad and stick it in your purse ... If you're a guy, stick a piece of paper in your wallet," she says.
There are many mobile-phone apps that track expenses too, some of which can be synced with the software on your computer.
"It may take a month of attempts to track spending to get good at it, because it takes a lot to make a habit," Ms. Taylor says.
Jeffrey Schwartz, the Toronto-based executive director of Credit Counselling Services of Canada, says the exercise is an important eye-opener that can help you plan your budget.
"You're going to be able to identify areas where you can cut back."
Every pay period: Put 10 per cent of your pay into savings
The key to easy saving, Mr. Schwartz says, is making sure it's invisible. You'll be contributing a steady amount to an account you won't touch and the money will be taken out before you even notice it was there in the first place. You can set up a plan with your bank to siphon off 10 per cent each paycheque - but feel free to start at a mere 5 or 6 per cent to ease into things, he says. "If you can't imagine trying to do that right from the get-go, like cutting out desserts altogether, it's not going to happen and you're not going to stick to it."
The best invisible method for a heavy debit-card user: Take advantage of bank programs that allow you to round up every retail purchase to the next $5 or $10 benchmark.
Say you are charged $22 at Shopper's Drug Mart for toothpaste, shampoo and deodorant. When you go to pay, the total is rounded up to $25 or $30. The extra money goes straight to a savings account.
"Before you know it, [people]potentially have enough for a vacation and they really didn't miss it," Mr. Schwartz says.
Every month: Tackle one major debt
You could spend the rest of your life making the minimum payments on your outstanding debts - and lose thousands on interest along the way. Instead, pick one to tackle each month, and put whatever extra you can into paying it down.
"Take your smallest debt and pay that off first and you have a psychological win," Ms. Taylor suggests. When she had two student debts to pay off, she tackled the smaller one first and said it made her feel as if she was digging herself out faster.
Mr. Schwartz, takes a different approach: "A lot of money you get every month is going out to service that debt. Reduce the most expensive one first."
If you receive seven or eight bills each month, there's a more drastic option. "If people have a number of credit cards, I try and get them to consolidate them," Mr. Morton says.
Every month: Find a new discretionary expense to cut or scale back
You hear about the "latte factor" - the way that daily specialty coffee can set you back $1,000 per year - but that's not the only discretionary expense that's draining your bank account.
You might consider your bundled telecom-service package a fixed expense, but there's a lot of trimming you can do in that department, Mr. Schwartz says.
"Before it was just a cellphone for people to reach us. Now it's a multimedia piece of equipment that we have to have and there's add-on pieces to each one," he says. Get rid of the unlimited texting plan if you only send 100 messages each month. Unbundle your services and shop around to different providers.
Every year: Reassess your credit-card and bank-account choices.
You can cut up your credit cards, freeze them, or hide them under the couch, as dozens of personal-finance books will advise you - but that's extreme.
You don't need to use it often, but a credit card is a near necessity, Murray Morton, a Toronto financial planner, says.
A relative shunned credit cards, preferring to live by cash only, he says. "They went out west and had to rent a car, and had to put down a $2,000 deposit because they had no credit record. Have [a credit card]for an emergency or to establish credit," he suggests.
Pay off your cards each month and look at the type of cards you have.
Ms. Taylor points out that she had a points credit card that promised flights but also came with a hefty annual fee.
"I could never get off the ground with [it]because I would never spend enough to get the rewards," she says. "Get a credit card with no fee that has an attainable rewards program."
Her current card has no annual fee and offers more modest rewards: The points she collects can be used for free groceries. It's also more in keeping with her lifestyle.
She also recommends switching to a no-fee chequing account - even if that means moving financial institutions.
"You're paying $20 a month to have a bank account with chequing privileges plus you're getting dinged at the ATM with every withdrawal," she points out. "I just wish Canadians would fire their bank more often."