I don't think you're doing anything wrong Grey Wolf, you're just really early in the game. I struggled right through month 3 to get everything done and to tech up as fast as possible. I lost France and Germany, but it doesn't seem to have made a big difference. About halfway through month four I lost Egypt and Nigeria, and that didn't make a difference either, but month 4 is really where I took off in terms of stability and growth. I'm at the beginning of month 5 and I have plasma weapons, titan/archangel armor, and I'm facing down packs of mutons with relative ease.

Part of it is due to a large number of ufo raids/crashes in month 4, as there tends to be a high amount of salvage that I have no use for and can sell, and they tend to have large amounts of alien alloys, which is usually what I run out of faster than money these days.