Emotional accounting – The formula for transforming negative thoughts into positive ones

10 minutes reading time

In this blog post you will learn how to really think positively and how to simply transform negative thoughts into positive ones (or at least neutralize the darkest ones).

As we all know it, positive thinking is a very important part of a happy and successful life, but you can’t just decide to think more positively. If it were that simple, everyone would be happy and optimistic and super positive.

As you can’t just decide to think more positively, you also can’t force yourself into positive thinking. It will only make you miserable. Trust me, I tried that approach.

When you try to force yourself into positive thinking, every time a negative thought crosses your mind, you will only get mad and angry and disappointed, and that means even more negative thoughts.

You accomplish the opposite.

What you need is a simple step-by-step process to gently outsmart your negative thoughts. The solution to more positive thinking lies in the so-called:

  1. Mental biofeedback
  2. Emotional accounting
  3. Thought stopping.

These three exercises are from the cognitive therapy, very well described in the book Feeling Good by David D. Burns. They are by far the best exercises when it comes to mind management and training yourself to think more positive.

They’re so simple mind exercises, yet so powerful.

How to outsmart your negative mind

Where the name comes from and why is emotional accounting so effective

The first step in transforming negative thoughts into positive ones is to systematically observe your thoughts and your feelings.

For example, by counting your negative thoughts, you automatically pay closer attention to what is going on in your mind. You develop special kind of mind awareness. You can finally see how negative thoughts cause negative feelings. In the next step, by categorizing your thoughts, you observe them even more closely and carefully.

In the end, with specifying the type of feeling and its intensity (0 % – 100 %) that comes with different types of thoughts, you become master of emotional and thought accounting. That’s where the origin of the name comes from.

Emotional accounting simply means identifying, recording, measuring, classifying, verifying, interpreting and auditing your thoughts. The same thing as traditional accounting does with numbers and business events. It’s a very efficient self-reflection exercise and a good way of determining how much your feelings actually improve after neutralizing your negative thoughts.

Now that you know where the name comes from, let’s dive deeper into why emotional accounting is so effective. Every toxic thought that appears in your head comes from somewhere. And it comes from your inner critic.

The inner critic is part of your mind that’s dark, negative and evil and only wants to hurt you and others. It’s usually an internalized voice of your overcritical, cold or neglecting parents. An event happens in your life (positive or negative) and your inner critic automatically attacks you with a bunch of negative thoughts. Nothing is ever right for the inner critic.

Extent of negative thoughts

If you let the inner critic become too strong, it’s like having a negative, unloving, rigorous grumbler in your head, blocking you from being happy, proud, powerful and going forward.

In all of us an “inner critic” resides, making sure you strive for progress and improvements (with encouragements and compassion when things don’t go as planned); but if the inner critic becomes too strong, it has the power to turn your life into a real misery and agony. At least in your own mind.

Your job is to protect yourself from the inner critic. And you do that with emotional accounting.

In practical terms, emotional accounting simply means talking back to your inner critic in a very systematic, structured and analytical way. That’s it. Your mind tries to criticize you to make reality seem darker than it is, but you don’t let your mind do that. You stop your negative mind and stand up for yourself.

Cognitive distortions – the main weapon of your inner critic

With emotional accounting, you protect yourself from your negative mind by talking back to the inner critic. The main weapon of your inner critic (or your negative mind, if you will) are cognitive distortions. Cognitive distortions are an extreme form of negative thoughts.

With cognitive distortions, you see reality much darker than it really is. It’s a trick your mind plays on you. Consequently, that arouses negative feelings in you as well as causes longer periods of depression or severe mood swings. That makes your mind weak, emotions fragile, and the world a miserable place to live.

Your negativity is in many cases not based on accurate perceptions of reality, but is instead the product of mental slippage. Bad things do happen to people, but not as often as your mind would like you to think.

It might seem that thoughts are only thoughts, but the extent of negative thinking is enormous. Your mood slumps, your self-image crumbles, your body doesn’t function properly, your willpower becomes paralyzed and your own actions defeat you. That’s why negative thinking needs to be dealt with once and for all.

There are many different types of cognitive distortions (somewhere between 10 – 20, depending on different definitions). They are your negative mind’s arsenal. Reading about them will immediately help you identify negative thoughts that pop up in your head.

And once you can easily identify them, you also have a good chance of fighting them off. The better you understand how your enemy works (your negative mind), the better chances you have to stop it and win.

Below is the list of the 10 main cognitive distortions:

  1. All-or-nothing thinking: You see your situation as black and white, you want to have everything or nothing. Everything is unreachable perfection, and consequently you feel like you have nothing. But that’s far from the truth.
  2. Overgeneralization: You generalize one bad event that happened to you (rejection, for example) as a never-ending pattern that you can’t do anything about.
  3. Mental filter: You see only negatives and minuses and ignore all the benefits and pluses.
  4. Discounting the positives: You give zero value to your past accomplishments, strengths and positive qualities. They don’t count, because everyone has them.
  5. Jumping to conclusions / Mind reading / Catastrophizing: You predict that things will turn out badly, even if you don’t have any proof for that, or you assume people will react negatively or reject you, again without any proof. Catastrophizing is jumping to negative conclusions on steroids.
  6. Magnification or minimization: You make a big deal out of small, not really important details, or you shrink things that are important to almost nothing.
  7. Emotional reasoning: You draw the conclusion that how you temporarily feel is who you really are. For example: “I feel like I didn’t write this well enough, so I must really be a bad writer”.
  8. “Should statements”: You criticize yourself and others based on what you or they should, must, or have to do. You moralize to others and yourself.
  9. Labeling: You put a negative label on your identity based on perceived shortcomings, even if they’re not real. “I’m a complete loser”, would be a nice example.
  10. Blame and personalization: You blame yourself for things that were not your responsibility or you blame others for things that were your responsibility. Or you assume that no matter what other people do, they do it to block you or harm you personally. You also constantly compare yourself to others.

And a few others very common cognitive distortions that can make your life a real misery:

  1. Always be right: Being wrong is simply unthinkable to you. You try to prove that every one of your actions or thoughts is correct. You try to persuade others to think the same way you do.
  2. Fallacy of fairness: You feel resentful or envious, because you think you know better what would be a fairer situation, than other people do.
  3. Fallacy of change: You expect other people to change or the world to change more to your liking and wants. And your happiness seems to depend on that kind of change.
  4. Fallacy of being a good person: You expect being a good person and sacrificing for others will pay off somehow and when it doesn’t you feel bitter.
  5. Hindsight thinking and what-ifs: You look back at your past decisions and make judgments how you could handle things better. But you handled it according to your knowledge and experience at that time. In the same way, you might constantly ask yourself “what if” about your future, but you’re never satisfied with the answer.
  6. Control error: You either see yourself as a helpless being with no personal power or control. Consequently, you feel stuck and externally controlled. The other extreme is if you feel responsible for everything and want to control everything.
  7. Unrealistic comparison: You compare yourself with other people, viewing them better as you are, not considering different starting points, life circumstances, genetic advantages, random luck events etc.

These are all the different ways how your mind plays tricks on you. Now let’s look at a few ways, how you can fight back, with the emphasis on the emotional accounting.

Mental biofeedback

Exercise 1: Mental biofeedback – a warm up for emotional accounting

The easiest exercise to start dealing with toxic thoughts is the so-called mental biofeedback, which as mentioned comes from cognitive behavioral therapy. The idea of the exercise is to start counting your negative thoughts. Just counting, nothing else. This way, you become more aware of your toxic thoughts.

You simply buy a counter to click or draw a line in a notebook every time you catch yourself with a thought that isn’t part of the rational mindset. After counting your negative thoughts for a few days, you can slowly take a step further as stated below.

  • Step 1: Only count toxic thoughts for a few days or even weeks
  • Step 2: Count toxic thoughts, but also write them down
  • Step 3: Count them, write them down and categorize them (what kind of cognitive distortion it is – have a list of cognitive distortions always with you to refresh your memory)

Soon you will learn to identify any kind of toxic thinking and poor mentality, and categorize thoughts very quickly. If you follow this (empathy) process for a few weeks, you will learn to identify and categorize thoughts in the blink of an eye.

Now it’s time to transform negative thoughts into more positive ones or at least neutralize them.

Emotional accounting

Exercise 2: Thought accounting or emotional accounting

The more you practice, the easier it will be to recognize negative thoughts. Especially be mindful of your thoughts when you’re in a bad mood or when you have a bad day. After a few months, it will become natural for you to identify and categorize different kinds of toxic thoughts on the fly.

The next important question in the process is what to do with all these toxic thoughts. Well, you neutralize them or even transform them into positive ones with emotional accounting.

The main point of emotional accounting is to practice talking back to your inner critic with the goal of developing a more realistic self-evaluation system or an evaluation of the situation you are in.

Talking back to your inner critic is key, and it’s really easy to do it. To perform emotional accounting, all you need is a simple table. The table has six columns. Here they are:

  1. Event or situation
  2. Toxic thought going through your head (automatic thought, self-criticism)
  3. Type of negative feeling it’s causing and the intensity of it (emotions)
  4. Categorization of the toxic thought
  5. Performing a rational response to the toxic thought(self-defense)
  6. New intensity of the negative feeling (outcome)

You simply go column by column. By far the most important is the column where you perform a rational response to the toxic thought. That’s the part of emotional accounting you need to pay most attention to.

It’s the self-defense against your negative mind. After you perform a rational response, it’s also useful to pay attention to the changes that come up in your feelings. If you perform the exercise correctly, you should immediately feel better. The negativity should be reduced.

Please note that there is always some kind of an event or outer stimulus that leads your mind to an automatic negative thought. Your job is to identify the situation and the automatic response and then perform self-defense.

Yes, you have to defend yourself from your own negative mind. In a way you must gently outsmart your mind to not distort reality in a negative way.

Practical examples

Let’s look at an example of emotional accounting.

  • Situation: I get an article back from my proofreader.
  • Automatic negative thought (self-criticism): I’m making so many grammar mistakes, I am a really poor writer.
  • Accompanying negative feelings: Anger, frustration (80%)
  • Type of negative thoughts: Overgeneralization, self-labeling, fixed mindset, reactive thinking, problem-oriented
  • Rational response (self-defense): Even if I still make quite a lot of grammar mistakes, I have great ideas for articles, my style is improving and so is my grammar, and I get a lot of positive feedback on my articles.
  • New feelings: Anger, frustration (20%), feeling proud of myself (60%)
  • Action-oriented mindset: The best way to improve my grammar is to have a great proofreader, read as much as possible, and do a few grammar exercises.

Now it’s time for you to do the exercise. Think of the last thing that made you really mad, frustrated or depressed. Or maybe you are facing such a situation right now. Try to do the exercise for three situations that are currently arousing negative feelings in your life.

Situation Negative emotions Automatic thought (Self-criticism) Type of cognitive distortion Rational response (self-defense) New emotions




Every time you find yourself in a bad mood, frowning or you overreact to a situation, do emotional accounting and see how much better you will instantly feel. Use the template in the beginning to reprogram your mind, but soon you will perform self-defense automatically whenever your negative mind attacks you.

Emotional accounting completely changed my life and how my mind works. The only situation where emotional accounting doesn’t work instantly (at least in my case) are severe emotional flashbacks, where the intensity of emotions is so strong, I can’t even identify negative thoughts.

Below you can download an Excel table that will help you do the emotional accounting:


  • Emotional Accounting – Template (xls)


Exercise 3: Thought stopping – setting boundaries to your inner critic

One more very useful cognitive exercise you can use in the battle with your negative mind is thought stopping. This exercise can be very effective when your negative mind is attacking you with the same negative thought over and over again or when you’re tired and talking back to your inner critic seems like an exercise in futility.

Thought-stopping is a process of interrupting and stopping your inner critic with pure willpower. You can simply say to your inner critic “No!”, “Stop!” or “Shut up!” when cognitive distortions get condensed and the mental process is directed towards drasticising, dramatizing and looking for perfection.

Thought-stopping is about setting boundaries against any anti-self process. It’s about stopping the mental war against yourself. As you will see with time, successfully stopping the inner critic demands practicing thought-stopping thousands upon thousands of times.

Anytime the critic gets too loud, you simply have to stop it, especially if emotional accounting doesn’t work. Thought stopping is so effective because saying “No!” is the backbone of the human instinct of self-protection.Thought stopping

Now you know your weapons that will help you deal with your negative mind. The best way is to start with mental biofeedback to better understand how your negative mind works, and which cognitive distortions are its favorite ones.

Then start practicing emotional accounting with the goal to neutralize the negative thoughts and to see reality as it is and not even one shade darker. And when your inner critic is to persistent, stop it with a firm no. If necessary, do it thousands and thousands of times.

When you learn to stand for yourself against your own negative mind – the stronger bully there is, you automatically feel much better about yourself and the world. Remember, even the worst enemy can’t hurt you as bad as your negative mind can. Don’t let that happen.

Source for emotional accounting: Cognitive behavioral therapy & David Burns: Feeling Good (2008) and Pete Walker: Complex PTSD: From surviving to thriving

About the author

Consulting and management coaching

Blaž Kos has managed venture capital investments over the past 12 years and participated in the development of the start-up ecosystem in the region. Today, he advises companies on growth strategies, process optimization, the introduction of lean agile methods and the digitalization of business. In addition to the Slovenian blog, he also writes an English blog, which was selected among the 50 best bloggers in the world in the category of personal and business growth.
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