Today I thought I'd put up a few diagrams I usually end up drawing in the air with my fingers when I talk to people about this topic.
If your expenditures always equal your income, you'll have a situation like this:
In this diagram, the green line represents your income, which (hopefully) will increase over time. The red line represents your expenditures, which will also increase as your standard of living grows with your income. In this scenario, you end up spending every dollar you make.
How can you improve upon this? You could increase your income more, but if your standard of living grows along with it, you still won't have any money left when you retire.
The most obvious way to improve the situation would be to reduce your expenditures:
To achieve this, always put away a fixed amount of your income toward savings, and live your life as though your income were a little lower.
The light-green area between income and expenditures is your savings. The larger this area, the more you have when you retire (ignoring inflation, investment growth, etc).
The next most obvious way would be to grow your standard of living a bit more slowly than you grow your income:
To achieve this, don't spend your raises when you get them. Instead, increase your RRSP contributions.
Finally, an easy one to overlook is just to delay your increases in standard of living for a few years:
To achieve this, hold off for a few years on expensive upgrades on your standard of living. You can still have everything you want; you just get it a little later. For instance, after you get your first real job, all you need to do is continue to live like a student for a year or two, and then grow your standard of living at the same rate as you would have done anyway. This is all it would take to have substantial savings when you retire.
For those of us planning to get rich slowly, the easiest way is through a combination of these three effects.