When a man from California called into The Ramsey Show this month, he admitted something shocking: he’s carrying close to US$800,000 (C$1.12 million) in credit card and loan debt. Dave Ramsey, the U.S. personal finance guru known for his blunt advice, didn’t hold back (1).
“This isn’t about the debt,” Ramsey told him. “Debt is the symptom of about six things. None of which are fixed by bankruptcy.”
While the caller’s story unfolded south of the border, this cautionary tale hits home for Canadians too.
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How he racked up $800,000 in debt
The caller explained that over the past decade, he’d made nearly US$2 million (C$2.8 million) through construction jobs and home-flipping ventures. But as time went on, poor business oversight, failed investments, lavish vacations and the reliance on credit cards for everyday expenses caused his finances to collapse.
His remodelling business had frequent setbacks. Employees broke tools or botched jobs, and instead of absorbing those costs through proper planning, he covered them with credit cards.
He also admitted to losing tens of thousands on stocks and property deals. Lifestyle spending didn’t help — he estimated vacations alone added up to nearly $200,000 (C$280,000) over the years. When work slowed and his employer went bankrupt, he relied on credit cards for groceries and bills.
“You don’t get to coast.” Ramsey said, “You’ve been just running around in circles, man. You’re going to have to really get focused.”
The hidden habits behind massive debt
Overspending rarely comes from one single event. More often, it’s the result of repeated “nice-to-have” purchases that quietly eat into financial stability.
For example, Canadians spent an average of $2,199 per trip overseas, according to Statistics Canada (2). Dining out adds up as well: the TouchBistro 2025 Canadian Diner Trends Report shows the average restaurant cheque has climbed to $63 per person, while the average takeout order costs $38 (3).
Canadians also admit to struggling with spending discipline. An Ipsos poll found 37% of Canadians had borrowed to cover day-to-day expenses, while more than half (57%) carried a credit card balance within the last two years (4).
Individually, these habits may not seem alarming. But paired with job losses, failed businesses or risky investments, they can be devastating.
That’s why Ramsey cautioned the man to not see bankruptcy as a quick fix.
“If it got wiped tomorrow,” Ramsey’s cohost John Deloney added, “He’d go figure out another way to borrow money.”
Read more: Here are 5 expenses that Canadians (almost) always overpay for — and very quickly regret. How many are hurting you?
How to avoid his mistakes
For readers who see some of their own behaviour reflected in this story, the good news is it’s possible to change course before things spiral into six-figure debt.
- Budget for wants: Apply the 50/30/20 rule, allocating 30% of your income to non-essentials like vacations and dining out.
- Delay gratification: Let potential purchases sit in your cart for at least a week before purchasing.
- Cut quickly: If debt starts piling up, slash discretionary expenses — from streaming subscriptions to restaurant meals or takeout orders.
- Boost income: Consider side jobs or freelance work before relying on credit cards.
- Stay vigilant in business: Self-employed Canadians should set aside reserves for their office, travel costs, work supplies, insurance and vehicle maintenance.
The Sacramento man’s story is extreme, but the habits that fueled it are surprisingly common. Vacations, shoppin, and eating out may feel harmless, but when combined with risky investments or a loss of income, they can quickly destabilize even a six-figure earner.
“You are now Mr. Frugal, Captain Frugal McDougall. That’s you, man. You don’t buy anything. All you do is work and pay bills.” Ramsey said.
The lesson for Canadians? Don’t wait until debt reaches a breaking point before taking your financial habits seriously.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
YouTube (1); Statistics Canada (2); TouchBistro (3); Ipsos (4)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.