We all dream of riches – or at least of financial security. Yet what most of us do not realize is that our goals are well within our reach – if we are willing to follow the basic tenets of financial responsibility to get there. The following five steps are basic, easy rules by which every person should run his or her financial life.

Step #1: Spend Less Than You Earn

Whether you are a billionaire or below the poverty line, this rule applies. There are plenty of wealthy people out there with debts far greater than their earnings. You will never get ahead financially if you spend more money than you earn. Simple as that. Be aware of exactly how many after-tax dollars you bring in each month, and be cognizant of how much you spend each month. It sounds simple – and it is – but a great many people just aren’t paying attention to these numbers.

Step #2: Have a Budget

Again, no matter how much or how little you earn, you need a budget to ensure you are spending your money wisely, investing enough, saving enough, and avoiding unnecessary debt. Your budget will also help you plan for the future and work toward your ultimate financial goals, whether that’s paying off your mortgage, putting the kids through school, retiring early, travel or other aspirations. A major benefit of budgeting is that it can help you save money – and even small, incremental amounts can add up over the long term.

Step #3: Reduce Credit Card Debt

If at all possible, carry only one credit card. Cut up and toss out the rest. Having multiple credit cards is a sure-fire way to allow your debts to run out of control. Secondly, always pay off all of your credit card debt each and every month. That’s right: pay it down to zero. Every month. Credit cards cause major financial problems not only because they tend to come with high interest rates; the main problem is that they make us feel like we have more money at our disposal than we actually do. Pay with cash instead of credit so you realize that you are using real money.

Step #4: Save Ten Percent of Everything You Earn

Whether you just earned 500 dollars or 100,000, save ten percent of it. You will hardly notice taking ten percent off the top of your earnings each month, but the impact of this savings plan in the long run will be significant. Add in the magic of compound interest and you will thank yourself for starting this system as early in life as possible. If you are later in life and you can afford to, try for 20 or 25 percent.

Step #5: Take Advantage of Government Savings Plans

In Canada, we pay a lot of taxes. If we don’t pay them, we can get in a great deal of trouble! However, there are some government plans designed to help you save taxes and save your money. By putting funds in Registered Retirement Savings Plans (RRSPs), Registered Education Savings Plans (RESPs) and Tax Free Savings Accounts (TFSAs), you save taxes and benefit from compound interest… and in the case of RESPs, the government will even give you money! These tools are created in your best interest, so take advantage of them. Over a lifetime of contributing to these funds, your benefit can be substantial indeed.

Over the course of the next six months, implement each of these steps, one at a time. Before the year is over, you will see a significant difference in your finances. Now imagine how that’ll look in ten years – or thirty!