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Dave Ramsey <\/p>\n Dave Ramsey <\/p>\n
Some financial mistakes feel unavoidable in the moment. Maybe the car needs to be replaced, your kid is heading to university or a friend offers to go halves on a property. But according to longtime personal finance advisor Dave Ramsey, giving in to those impulses can be costly \u2014 sometimes catastrophically so.<\/p>\n
Across 32 years of fielding calls on The Ramsey Show, Ramsey has watched people make the same errors over and over. In one episode, he called these patterns out plainly: \u201cDumb! Really dumb (1)!\u201d<\/p>\n
Don’t Miss <\/p>\n
\u201cThese things baffle me, that\u2019s why I’m hitting them,\u201d Ramsey said. \u201cBecause they\u2019re just illogical.\u201d<\/p>\n
While Ramsey\u2019s advice comes from his own experience, the three mistakes he flagged translate north of the border as well \u2014 with some important local nuances that make them even more financially treacherous in some cases.<\/p>\n
1. Co-buying property with someone who isn\u2019t your spouse <\/p>\n
Ramsey has long opposed the idea of buying property with anyone who isn\u2019t a married partner. His concern is practical: if the relationship ends \u2014 while not all do, some will \u2014 untangling shared assets between unmarried individuals can become an expensive, drawn-out and emotionally burdensome experience.<\/p>\n
\u201cSeparating assets between an unmarried couple can be complicated,\u201d Ramsey has said. \u201cThey do not always share the same property rights as married couples.\u201d<\/p>\n
In Canada, this warning carries added weight \u2014 because the property rights of common-law couples varies dramatically depending on the province or territory you live in.<\/p>\n
In British Columbia, couples who have lived together for at least two years are treated similarly to married spouses under the Family Law Act when it comes to dividing property and debt (2). But in Ontario, common-law partners don\u2019t have an automatic right to equalize net family property the way married spouses do under the Family Law Act \u2014 meaning a partner who contributed financially to a shared home may have to fight for their share in court (3).<\/p>\n
Qu\u00e9bec offers even less protection: under the Civil Code, de facto (common-law) couples have no automatic right to the family home or to any division of each other’s property upon separation, regardless of how long they were together. Each partner walks away with what is legally in their own name (4). However, as of June 30, 2025, Quebec’s new parental union regime \u2014 introduced through Bill 56 \u2014 automatically extends property-sharing and succession protections similar to those of married couples to common-law partners who have a child together, representing a significant shift for unmarried parents in the province.<\/p>\n
The housing affordability crisis has made co-ownership a tempting solution, particularly for first-time buyers. Canadian Mortgage Trends News acknowledges co-ownership as a growing strategy, especially in high-cost markets \u2014 but strongly recommends that any co-buyers, particularly those who aren\u2019t married, establish a formal co-ownership agreement drafted with legal advice before signing anything (5).<\/p>\n
If you\u2019re not in a position to purchase on your own or with a spouse, there are still ways to participate in real estate as an asset class. Real estate investment trusts<\/a> (REITs) available on Canadian stock exchanges allow you to invest in a portfolio of income-producing properties \u2014 commercial, residential or industrial \u2014 without taking on the legal and financial complexity of co-ownership. REITs are available through self-directed brokerage accounts, including those inside a Tax-Free Savings Account<\/a> (TFSA) or Registered Retirement Savings Plan<\/a> (RRSP), which can further reduce the tax drag on returns.<\/p>\n If homeownership is the goal, the First Home Savings Account<\/a> (FHSA), lets eligible Canadians contribute up to $8,000 a year (to a lifetime maximum of $40,000) to a registered account specifically for a first-home purchase. Contributions are tax-deductible, and qualifying withdrawals are tax-free \u2014 a powerful combination.<\/p>\n Stop leaving money on the table. Discover which Canadian banks<\/a> are currently paying up to $700 just for opening a new account.<\/p>\n Read more: Here are the 3 net worth milestones that change everything for Canadians<\/a> (and what they say about you)<\/p>\n 2. Spending more on education than your career can repay <\/p>\n Ramsey\u2019s take on post-secondary education is blunt: the return on investment needs to make sense.<\/p>\n \u201cDon\u2019t spend $250,000 getting a master\u2019s degree in sociology so you can be a caseworker for the state making $38,000,\u201d he said (1). He believes students should honestly assess their likely earnings before taking on debt for a degree.<\/p>\n Though the numbers look different in Canada, the same principle applies. Canadian universities are generally less expensive than their American counterparts, but tuition costs have risen steadily, and many graduates carry debt well into their working years.<\/p>\n As of the 2023\u201324 fiscal year, the federal government held approximately $22.6 billion in outstanding Canada Student Loans, according to the National Student Loans Service Centre (NSLSC) (6). That figure doesn\u2019t include provincial student loan programs, meaning the total debt burden on Canadian students is certainly higher.<\/p>\n The lesson: before taking on student debt \u2014 whether for yourself or co-signing for a child \u2014 it\u2019s worth calculating expected earnings against repayment obligations. The Canadian government\u2019s student loan repayment estimator, available through the NSLSC, can help model different repayment scenarios (7).<\/p>\n For parents hoping to reduce the burden of post-secondary costs, the Registered Education Savings Plan<\/a> (RESP) remains one of the most powerful tools available. Contributions to an RESP aren\u2019t tax-deductible, but the money grows tax-sheltered. Also, the federal government adds a Canada Education Savings Grant (CESG) equal to 20% on the first $2,500 contributed a year \u2014 up to $500 annually and $7,200 over the lifetime of the plan for each child (8). That free money is difficult to beat.<\/p>\n For those who want to save beyond an RESP, or for adults saving toward their own continuing education, a Guaranteed Investment Certificate<\/a> (GIC) can be a low-risk, predictable-growth option. GICs are offered by banks and credit unions and pay a fixed interest rate for a set term (9). Deposits held at member institutions are protected by the Canada Deposit Insurance Corporation (CDIC) up to $100,000 per depositor per insured category. Non-redeemable GICs typically offer higher interest rates but come with early-withdrawal penalties, so they work best for money you won’t need to access mid-term.<\/p>\n For those already carrying student debt, consolidating higher-interest balances into a lower-rate personal loan \u2014 available through Canadian banks and credit unions \u2014 can reduce the total interest paid and simplify monthly payments. Speaking with a not-for-profit credit counsellor, such as someone certified through Credit Canada, is a free or low-cost starting point (10).<\/p>\n 3. Upgrading your car when you don\u2019t have to <\/p>\n Of all of Ramsey\u2019s complaints, this one may be the most emotionally loaded.<\/p>\n \u201cYou were driving a $6,000 car,\u201d he told one caller. \u201cYour car gets totalled, you get a cheque for $6,000 and, suddenly, $6,000 cars aren\u2019t good enough for you. That\u2019s dumb (1)!\u201d<\/p>\n According to Ramsey, a crisis or a windfall shouldn\u2019t be the trigger for a lifestyle upgrade. A paid-off car is one of the cheapest vehicles to own \u2014 even if it\u2019s old \u2014 because there are no monthly payments and, typically, lower insurance costs.<\/p>\n In Canada, the temptation to upgrade has never been more expensive. The average transaction price for a new vehicle in Canada reached approximately $63,000 by the end of 2025, according to AutoTrader (11). That figure doesn\u2019t include financing costs, mandatory insurance, fuel or maintenance \u2014 all of which add hundreds of dollars to the monthly burden of a new vehicle.<\/p>\n If a vehicle replacement truly is necessary, Ramsey\u2019s advice holds: Buy used, pay cash if possible and drive it as long as it runs. If financing is unavoidable, shop for the lowest interest rate available \u2014 and don\u2019t let the monthly payment be your only measuring stick. A longer amortization lowers monthly costs but increases total interest paid significantly.<\/p>\n One area where Canadians can take action is auto insurance. Rates vary significantly by province and insurer. The Financial Services Regulatory Authority of Ontario (FSRA), for example, regulates auto insurance rates in Ontario \u2014 yet many drivers never shop around (12). Using an insurance comparison tool can unveil meaningful savings.<\/p>\n Next steps Canadians can take <\/p>\n Ramsey\u2019s three mistakes share a common thread: they all involve making an emotional or reactive financial decision without fully understanding the long-term consequences.<\/p>\n Here\u2019s how to apply the lessons in a Canadian context:<\/p>\n On co-buying property: If you\u2019re considering buying property with someone you aren\u2019t married to \u2014 a friend, sibling or partner \u2014 consult a real estate lawyer first. A co-ownership agreement can define each party\u2019s contribution, share of appreciation, what happens upon sale or if one party wants out, and how disputes are resolved. The cost of that legal document is far less than the cost of a dispute later. Also, understand your province\u2019s specific laws before signing.<\/p>\n On education costs: Before taking on debt for a degree or graduate program, research median earnings in your target field using StatCan\u2019s data or the Government of Canada Job Bank. If you have children, open an RESP as early as possible \u2014 even small annual contributions can trigger years of compound growth and CESG matching that you can\u2019t claim retroactively.<\/p>\n On buying a car: Aim to buy used, pay cash and stay in a vehicle until repair costs consistently exceed a monthly car payment. If you’re financing, get pre-approved through your bank or credit union before stepping onto a dealership lot \u2014 it gives you negotiating power and helps you avoid dealer financing that may carry a higher rate. Additionally, compare auto insurance quotes at each renewal.<\/p>\n Most importantly: Build a written budget before making any major financial decision. The discomfort of looking at the numbers ahead of time is far smaller than the financial and emotional cost of cleaning up a mistake after the fact.<\/p>\n \u2014 with files from Melanie Huddart<\/p>\n What To Read Next <\/p>\n Join 19,000+ readers and get Money.ca\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/p>\n Article Sources <\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines<\/a>.<\/p>\n YouTube (1)<\/a>; Government of British Columbia (2)<\/a>; Mills & Mills LLP (3)<\/a>; Minist\u00e8re de la Justice du Qu\u00e9bec (4)<\/a>; Canadian Mortgage Trends (5)<\/a>; Government of Canada (6)<\/a>; CanLearn (7)<\/a>; Government of Canada (8)<\/a>, (9)<\/a>; Credit Canada (10)<\/a>; CNW Group (11)<\/a>; Financial Services Regulatory Authority of Ontario (12)<\/a><\/p>\n This article originally appeared on Money.ca<\/a> under the title: Dave Ramsey\u2019s 3 \u2018dumb\u2019 money mistakes many people make \u2014 and why Canadians need to hear his warning<\/a><\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Dave Ramsey Some financial mistakes feel unavoidable in the moment. 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