On paper, Jackson’s debt-free status and $200,000 annual salary might look like an easy ticket to financial freedom.
But in reality, the 25-year-old heavy-duty mechanic from Canada admits he’s often staring at a bank account that doesn’t reflect his hard work or financial progress.
“I get my paychecks and I pay my bills with it and then I don’t look at my account all that much,” he said on a recent episode of The Ramsey Show. “I just kind of know there’s always a good chunk of change in there and it usually fluctuates between $15,000 and $25,000.
“But it’s not really going ahead from there because I’m kind of just living, you know?”
Jackson’s situation isn’t unusual, but celebrity finance personality Dave Ramsey believes his “healthy disgust” with his lack of progress at such a young age certainly is. Here’s why many high-income people struggle to accumulate meaningful wealth.
Biggest mistake rich people make
Jackson’s difficulty holding onto his high income isn’t unique. According to A 2024 report by Leger, 47% of Canadians live paycheck to paycheck.
Lifestyle creep and untamed budgets appear to drive many people to spend as much — or even more — than they earn. According to Ramsey, the biggest mistake high earners make is a lack of intentionality with their money.
Jackson, however, is determined to avoid that mistake.
“I feel like I make too much money to not have some sort of a plan and I don’t want to feel like a fool who squanders a fortune,” he tells Ramsey, who responds with a compliment: “Just asking the question puts you in the top 5%, dude.”
Ramsey’s advice? Start with a robust budget.
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Give every dollar a job
According to Ramsey, the only way to be intentional with your money is to set up a spending plan before the income arrives.
“We’re going to write it down — before the month begins — where every dollar is going to go,” he told Jackson. “Give every dollar an assignment. Contract with yourself. If you have a spouse, do it with your spouse.”
A tight monthly budget should help Jackson earmark cash for necessary expenses, discretionary spending, taxes and emergencies — and ideally leave extra for savings and investments. Working with a financial planner would also be ideal.
Unfortunately, a 2024 survey by the Canadian Securities Administrators found that only 61% of respondents use a financial advisor — its lowest level, down from 8% in 2020.
In other words, a robust, professional budget is rare, which helps explain why living paycheck to paycheck is so common. You can avoid the same pitfalls by hiring a professional or setting up a solid budget of your own with the help of a budgeting app.
Sources
1. YouTube: I Make $200,000 and Have Nothing To Show For It (April 21, 2025)
2. Leger: North American Tracker September 2024 Edition
3. CSA: CSA 2024 Investor Index
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
