My Mom Taught Me How She Bought Her First Car Without Loan

Jennifer, one of our dear readers, sent us a letter about the best money lesson her mom ever taught her. The way she learned it is so sweet and unexpected. It might just change how you think about saving, here’s what she shared.

We have a personal story from a beloved reader.

Hi Bright Side,

When I got my first paycheck, I felt on top of the world. I had so many things I wanted—new clothes, a weekend trip, maybe even the latest phone. Before I could even start spending, my mom sat me down and said, “Before you touch a dime, pay yourself first.”

I rolled my eyes. “Mom, I worked hard for this money. I deserve to enjoy it!”

She smiled. “And you will. But trust me, future you will thank present you if you start saving now.”

To prove her point, she pulled out an old notebook. Inside were her earnings and savings from when she was my age. She circled a number and said, “This is how much I saved each month. It seemed small at the time, but after a few years, I had enough to buy my first car—without a loan!”

That hit me. I had never thought of saving as a way to buy freedom.

So, I took her advice. Every paycheck, I put aside 20% before I spend anything else. At first, it was tough—I wanted to use that money for fun stuff. But over time, I saw my savings grow, and it felt amazing.

A year later, when my friends were scrambling for credit cards to pay for a trip, I booked my ticket in cash. No stress, no debt—just pure excitement. That’s when I realized saving first doesn’t mean missing out—it means having control over your life.

Now, every time I save, I hear my mom’s voice: “Pay yourself first.” And I know she was right all along.

— Jennifer

Here are five frequent budgeting errors and how to prevent them.

Creating and sticking to a budget is essential for financial stability, but many people fall into common traps that can make budgeting ineffective or frustrating. Whether you’re just starting out or trying to refine your financial habits, avoiding these mistakes can help you stay on track and reach your financial goals.

1. Not Tracking Expenses

The Mistake: You set a budget but don’t monitor where your money actually goes. You assume you’re following your plan, but small, everyday purchases—like coffee, subscriptions, or impulse buys—slowly add up. Before you know it, you’ve overspent and have no idea where your money went.

How to Avoid It: Use technology or a simple spreadsheet or a handwritten expense tracker works. Make it a habit to review your spending weekly, so you can catch problems before they spiral out of control. Categorize your expenses and compare them to your budget regularly. The key is awareness—if you know where your money is going, you can control it better.

2. Setting Unrealistic Goals

The Mistake: You create a budget that’s too restrictive, cutting out all non-essential spending. While it might seem smart to eliminate dining out, entertainment, or shopping completely, such a strict budget can be unsustainable. Eventually, you may feel deprived, leading to impulse splurges that throw your finances off track.

How to Avoid It: Be realistic about your lifestyle and spending habits. Instead of cutting out fun expenses entirely, allocate a reasonable amount for them. A good starting point is the 50/30/20 rule:

• 50% of your income goes to necessities (rent, utilities, groceries, insurance).
• 30% goes to discretionary spending (entertainment, dining out, hobbies).
• 20% is saved or used to pay off debt.

By allowing some flexibility in your budget, you’ll be more likely to stick with it long-term.

3. Forgetting to Budget for Irregular Expenses

The Mistake: You budget for your monthly expenses but forget about occasional costs like car repairs, medical bills, holiday shopping, or annual subscriptions. When these expenses come up, they can throw your budget into chaos, often forcing you to dip into savings or rely on credit cards.

How to Avoid It: Plan for these expenses in advance by setting up sinking funds—small, regular contributions toward future expenses. For example, if you know your car insurance is due every six months, divide the total amount by six and save that much each month. The same goes for holiday gifts, vacations, or home maintenance. Having a buffer for these costs helps prevent financial surprises.

4. Not Adjusting Your Budget Regularly

The Mistake: You set a budget once and never update it, even when your financial situation changes. Over time, your income, expenses, and financial goals may shift, and failing to adjust your budget accordingly can make it outdated and ineffective.

How to Avoid It: Treat your budget as a living document—something that evolves with your life. Reassess it monthly or whenever a major financial change occurs (such as a raise, job loss, or new expense). If you notice that you’re consistently overspending in one category or underspending in another, adjust your allocations to reflect reality. Staying flexible ensures your budget remains practical and relevant.

5. Ignoring an Emergency Fund

The Mistake: You focus on paying off debt or saving for big goals, but neglect to set aside money for unexpected emergencies. Without an emergency fund, an unexpected expense—like a medical bill or car repair—can throw your finances into disarray and force you into debt.

How to Avoid It: Prioritize building an emergency fund with at least three to six months’ worth of essential expenses. If that sounds overwhelming, start small—aim for at least $500 to $1,000 to cover minor emergencies. Keep this money in a separate savings account that’s easily accessible but not too tempting to dip into. Having this financial safety net will help you avoid using credit cards or loans in emergencies.

Budgeting isn’t just about tracking numbers—it’s about making intentional financial choices that support your long-term goals. By avoiding these common mistakes, you can create a budget that works for you, reduces financial stress, and helps you achieve financial freedom. Remember, budgeting is a skill that improves over time, so be patient, stay consistent, and adjust as needed.