Optimism
The Danger of Expectations: How They Shape Our Lives
We tend to expect a lot from our future. Managing those expectations is key.
Posted January 3, 2025 Reviewed by Margaret Foley
Key points
- The gap between expectations and reality creates disappointment.
- Expectations can drive performance but can also cause burnout.
- While we may set high expectations, outcomes are often beyond our control.
Expectations are tricky. On the one hand, they motivate us, guiding our behavior toward goals and achievements. On the other hand, they can be a double-edged sword—leading to disappointment, anxiety, and even burnout when reality doesn’t match what we envisioned. Whether it’s a personal ambition, a professional target, or a financial milestone, expectations influence our behavior in profound ways. But what happens when our expectations become unrealistic or misaligned with reality? Let’s dive into the psychological impacts of expectations, why we set them, and what we can do to manage them effectively.
The Reality of Outcomes: A Sobering Data Check
Before we delve into the psychology of expectations, let’s ground ourselves with some real-world data on outcomes. Expectations often lead us to believe that success is inevitable if we work hard enough or want it badly enough. However, the numbers tell a different story:
- Career Success: Everyone wants to be the CEO, but only one person can hold that title in any given company. According to a report by Equilar (2023), less than 1 percent of professionals ever make it to the C-suite, and only a fraction of those become CEOs.
- Marriage and Relationships: The expectation of a lifelong, happy marriage is common, yet divorce rates remain significant. In the U.S., approximately 40 to 50 percent of marriages end in divorce, according to the American Psychological Association.
- Startup Failure Rates: Entrepreneurs often start businesses with high expectations of success. However, 90 percent of startups fail, according to a study by Startup Genome (2019). Of those that do succeed, only a handful become household names.
- Financial Goals: Many people set ambitious financial goals, such as retiring early or achieving millionaire status. Yet, according to the Federal Reserve's Survey of Consumer Finances (2022), only 13.5 percent of U.S. households have a net worth of $1 million or more.
These data points highlight a crucial fact: Outcomes are often outside of our control, no matter how hard we work or how much we want something to happen. This disconnect between expectations and reality sets the stage for disappointment and dissatisfaction.
The Psychology of Expectations
Psychologists have long studied the role expectations play in shaping human behavior. At their core, expectations are predictions about what will happen in the future. We set expectations based on past experiences, social norms, and personal beliefs. But when these predictions are unmet, we experience cognitive dissonance—the uncomfortable gap between what we expected and what actually occurred.
The Expectation-Performance Link
One of the earliest studies on expectations and performance is the Pygmalion effect, a phenomenon where higher expectations lead to better performance. In a famous study by Rosenthal and Jacobson (1968), teachers were told that certain students were expected to excel academically. These students, who were randomly selected, ended up performing better, simply because their teachers believed they would. That belief could manifest itself in a variety of ways, including the benefit of the doubt as it relates to student performance, teacher self-reflection as it relates to their own actions, and perhaps more importantly, their actions toward building the students’ self-efficacy as it relates to new content.
While this shows that positive expectations can improve outcomes, the flip side is equally true: Low expectations can create self-fulfilling prophecies, where individuals perform poorly because they believe they’re expected to fail.
The Danger of Unrealistic Expectations
While having high expectations can be motivating, they can also backfire when they become unrealistic. The gap between our expectations and reality is a significant predictor of dissatisfaction, anxiety, and even depression. Here are some key psychological dangers of setting unrealistic expectations:
1. Disappointment and Frustration
When reality doesn’t meet our expectations, we often feel disappointed. According to research by Davidai and Gilovich (2018), unmet expectations are one of the primary drivers of dissatisfaction in life. The study found that people tend to overestimate how much their future selves will achieve, leading to chronic disappointment when those expectations aren’t met.
2. Anxiety and Stress
Expectations can also increase stress levels. When we set high expectations for ourselves or others, we create a pressure-filled environment. According to a study published in the Journal of Personality and Social Psychology (2017), individuals with high self-imposed expectations are more prone to anxiety disorders and burnout.
3. Relationship Strain
Unrealistic expectations in relationships—whether personal or professional—can cause significant strain. A study by Murray et al. (1996) found that partners who held overly idealistic views of their relationships were more likely to experience dissatisfaction over time. The gap between idealized expectations and reality often leads to conflict and disappointment.
Why We Set Unrealistic Expectations
Understanding why we set unrealistic expectations is key to managing them effectively. Several psychological factors drive this behavior:
1. Optimism Bias
Humans are naturally optimistic. We tend to believe that the future will be better than the past and that we will achieve more than we actually will. This optimism bias is beneficial in some ways—it keeps us motivated—but it also leads to inflated expectations.
2. Social Comparison
Social comparison theory, developed by Leon Festinger (1954), suggests that we determine our self-worth based on how we compare to others. In the age of social media, this comparison is constant and often leads to unrealistic expectations about what our lives should look like.
3. Cultural Narratives
Cultural narratives also play a role. In many societies, success is defined by specific milestones—getting a degree, landing a high-paying job, or achieving financial independence by a certain age. These societal expectations can create pressure to meet milestones that may not align with our personal goals.
The Financial Impact of Expectations
In financial planning, expectations play a huge role in decision-making. Clients often come to advisors with expectations about investment returns, retirement savings, and lifestyle goals. When those expectations aren’t met, clients can become frustrated or disengaged.
A study by Barberis and Thaler (2003) on behavioral finance highlights how expectations influence risk tolerance and financial decisions. When people expect high returns and experience losses instead, they often panic and make impulsive decisions that harm their long-term financial health.
Managing Expectations: Five Practical Strategies
Given the dangers of unrealistic expectations, how can we manage them more effectively? Here are five strategies to align expectations with reality:
1. Practice Radical Acceptance
Radical acceptance is a concept from dialectical behavior therapy (DBT) that involves accepting reality as it is, rather than how we wish it to be. By practicing radical acceptance, we can reduce the cognitive dissonance caused by unmet expectations.
2. Set Process-Oriented Goals
Instead of setting outcome-oriented expectations (e.g., “I will save $100,000 in two years”), focus on process-oriented goals (e.g., “I will save 20 percent of my income each month”). Process goals are more achievable and help reduce disappointment.
3. Manage the Expectation Gap
The expectation gap is the difference between what we expect and what actually happens. To manage this gap, adjust your expectations based on new information. Cognitive-behavioral techniques, such as reframing, can help align expectations with reality.
Example: If a client expects a 10 percent return on investment, but the market forecast suggests 5 percent, help them adjust their expectations accordingly.
4. Limit Social Comparison
Social media can exacerbate unrealistic expectations. Encourage clients to limit their social media use or practice mindful consumption to reduce comparison-driven anxiety.
5. Use Visualization Techniques
Visualization can help align expectations with reality. Research shows that visualizing potential obstacles and setbacks increases the likelihood of success. This technique, known as mental contrasting, involves imagining both the desired outcome and the challenges along the way.
Expectations are a natural part of human psychology. They guide our behavior, influence our decisions, and shape our experiences. However, when expectations become unrealistic, they can lead to disappointment, stress, and strained relationships. By understanding the psychology of expectations and implementing strategies to manage them, both individuals and financial advisors can reduce the negative impacts of unmet expectations and foster healthier, more realistic outlooks on life and finances.
References
Barberis, N., & Thaler, R. (2003). A Survey of Behavioral Finance.
Davidai, S., & Gilovich, T. (2018). The Headwinds/Tailwinds Asymmetry.
Festinger, L. (1954). A Theory of Social Comparison Processes.
Murray, S. L., Holmes, J. G., & Griffin, D. W. (1996). The Benefits of Positive Illusions.
Rosenthal, R., & Jacobson, L. (1968). Pygmalion in the Classroom. Journal of Personality and Social Psychology (2017).