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Your Expectations Matter

how you feel is determined by how reality differs from your expectations

❝Expectations [are] easy to ignore because their value isn't on a price tag. But your happiness completely relies on expectations.❞ -Morgan Housel

It's 2019, and I've entered a squash tournament. I have my first match against somebody playing up a level, meaning that he normally plays with the C-level players, but he's playing in this tournament as a B player. I commend him for challenging himself this way, but there's no doubt in my mind that I'm going to win. We start playing, and I quickly win the match 3-0. I just won a tournament match, but since I expected to win it doesn't feel all that joyous.

In my second tournament match, I play a very good player. I've played him before and don't feel like I stand a chance. I'm going to try, but not only do I think I'm going to lose the match, but I don't think I'm going to win a single game. I'm expecting to lose 0-3. Much to my surprise, I win the first game! I can't believe it! I've got a 1-0 lead against a great player. This is way better than I expected. I am really excited because I thought I would lose every game.

I caught him by surprise in the first game, but he quickly learns my style of play and adjusts his game. He wins the next three games, and I lose the match 1-3. I just lost a tournament match, but it doesn't feel so bad because I thought I was going to lose anyway.

Because I lost, I enter the consolation bracket and play against all the other people who lost in the main bracket. My first consolation match is against a person I've played before and, although it will be a good match, I think I'll beat him. Indeed, it is a good match that goes five games. But, I lose in the fifth to lose the match 2-3. I thought I was going to win, but he beat me. I feel disappointed in myself and a little bit angry.

Expectations matter. When my expectations are met, I don't feel anything, good or bad. When I fail to meet my expectations or my expectations are exceeded, then my mood changes. Deviations from our expectations change how we feel, regardless of whether it was a good or bad experience.

it feels like positive experiences should feel good and negative experiences should feel bad.


Intuitively, it feels like an experience we view as positive would feel good, and an experience we view as negative would feel bad. It's intuitive because it sounds like it makes sense. Positive events are good and negative events are bad.

Yet, as you look back on your life, you've probably experienced positive events that didn't feel like much. You expected a promotion and got it. You thought you would win the game, and you did. Getting a promotion and winning the game are positive events, but because we already have those events baked into our expectations, we don't feel any additional joy.

The same works with negative experiences. You've likely experienced negative events in the past that didn't sting as much as you thought. Perhaps you thought that when the company worked for was sold that you would be let go, and then it happened. Maybe you knew you wouldn't win that 5K, and then you finished in the middle of the pack. Losing your job and not winning a race could be seen as negative events, but these, too, were already baked into your expectations, so it didn't change the needle much.

Similarly, expecting a life without problems means guaranteeing misery for yourself because there will always be problems. If I go for a drive and expect a perfect, stress-free drive, I have now opened the door to disappointment when somebody cuts me off or speeds past me. If instead, I expect there to be maniac drivers, my mood shifts away from "I can't believe this guy!" to "There he is..."

It turns out that positive and negative events don't impact how we feel as much as our expectations do. A deviation from our expectations changes how we feel, whether or not it's a positive or negative experience. In other words, how we feel is the difference between what happened and what we thought would happen.

how we feel depends on what happens relative to what we expect


To drive that point home, consider the last time you expected things to go your way. Once you expect things to go your way, you experienced a little bit of joy. If, for example, your boss informs you of a new job she encourages you to apply for, and you believe that you're a shoo-in for the job, you'll feel excited. Then, when things turn out your way, all that happened is what you thought "should" have happened. The joy was used up when you set your expectation. Having things turn out your way was baked into the process.

Similarly, consider the last time you expected things to turn out poorly. It's the moment you learned things were going to turn out poorly that you experienced sadness. Things turning out poorly for you became your expectation of how things would turn out. Then, when things turned out exactly as you expected, you didn't feel any worse because it was already part of your expectations.

when we get what we expect, it feels like background noise


On the other hand, when things turn out even better than you expected, you feel a jolt of excitement. If, for example, you thought you were to land a new client and instead got three new clients, you feel joy. If you thought you were going to get a raise and instead got both a raise and a promotion, you feel ecstatic.

Similarly, when things aren't as bad as you thought they would be, you feel excited. If you made a major mistake at work and thought you were going to get fired but instead or just reprimanded and got to keep your job, you feel a sense of relief even though you got reprimanded. If you thought you were going to have to pay $2,000 for an emergency expense and the bill turned out to be $1,200, you feel good even though you had to pay a $1,200 expense.

It's the deviation from your expectation that increases your satisfaction.

we feel a sense of joy when reality exceeds our expectations

The same effect works when things turn out worse than you expected. When things fall short of your expectation, you feel a little bit sad. If you thought you would land two new clients and instead landed one, you feel bad even though you just landed a client. If you expected both a raise and a promotion and instead just got a raise, you feel cheated even though you just got a raise.

In much the same way, when a negative event turns out worse than you thought, you'll feel sorrow. If you thought you would be reprimanded by your boss and instead got fired, you'll feel angry and sad.

Your expectations matter, so it's helpful to understand what you expect.

we feel bad when reality doesn't meet our expectations


Tying your satisfaction to the deviation from your expectations makes it harder to practice gratitude. If you can learn to let go of expectations and attachment to outcomes, you can start to be satisfied with the process. You can be satisfied with the systems you create instead of the specific outcomes and goals you want to achieve. You can learn that not everything is a means to a specific and that you expect. Embracing the mindset that "you don't know what the outcome will be, and that's okay" is challenging, but it is worth it to try.

This is not a case for pessimism. You might be reading this and wondering if I'm proposing expecting nothing so that you will always exceed your expectations. That may sound tempting, but there's a difference between high expectations and motivation. If you set your expectations to nothing, then it's likely that you won't be motivated to try anything. Finding motivation for the process, not the outcome, and detaching from any expected outcome will help you embrace gratitude for whatever happens.

letting go of outcomes helps you accept whatever happens

Expectations drive our feelings. Being aware of the expectations we bring to life will help us set our judgements accordingly. Expecting a life without problems sets us up to be perpetually disappointed. Changing our expectations to expect problems, market downturns, surprise expenses, and so on, helps us put things into perspective and tell ourselves a different story about what's happened.

You get one life; live intentionally.

If you know someone else who would benefit from reading this, please share it with them. Spread the word, if you think there's a word to spread.

Related Money Health® Reading
References and Influences

Ariely, Dan & Jeff Kreisler: Dollars and Sense

Ben-Shahar, Tal: Happier, No Matter What

Bloom, Paul: The Sweet Spot

Dalai Lama & Howard Cutler: The Art of Happiness

Gilbert, Daniel: Stumbling on Happiness

Hanh, Thich Nhat: No Mud, No Lotus

Hanson, Rick: Hardwiring Happiness

Housel, Morgan: Expectations and Reality

Irvine, William: Guide to the Good Life

Irvine, William: A Slap in the Face

Irvine, William: The Stoic Challenge

Manson, Mark: Everything is Fucked

Reivich, Karen & Andrew Shatte: The Resilience Factor

Wallace, David Foster: This is Water

Note: Above is a list of references that I intentionally looked at while writing this post. It is not meant to be a definitive list of everything that influenced by thinking and writing. It's very likely that I left something out. If you notice something that you think I left out, please let me know; I will be happy to update the list.



About the Author

Derek Hagen, CFA, CFP, FBS, CFT-I, CIPM is a speaker, writer, and coach specializing in financial psychology, meaning and valued living, resilience, and mindfulness.


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