Many years ago, my wife and I went to dinner with another couple whom I’ll call Pam and Stan. I went to high school with Pam, and my wife had grown up knowing Stan. They were among the smartest and most successful people we knew. I was always a bit intimidated by them and their lives.

I remember this particular conversation well because Pam made a comment that has stuck with me ever since. Pam drove a well-used minivan. During our conversation, she mentioned wanting a new car, but then said, “We can’t afford it right now. It’s just not in the budget.”

At the time, I didn’t know many successful people who would say out loud, “We can’t afford it.” After all, what did she mean they couldn’t afford a new car?

Pam didn’t go into specifics, but the discussion suggested a simple reason. They didn’t buy a new car because they had a budget. That budget represented their best effort to align their current spending with what they really wanted in the future. Based on this calculation, they couldn’t afford a new car.