Glossary: Black-and-White Thinking
Black-and-White Thinking
In Everyday Terms:
Black-and-white thinking is when everything feels like it’s all or nothing—things are either completely good or totally bad, right or wrong, success or failure. There’s no in-between, and it can make decision-making and relationships tricky because it’s hard to see the gray areas or accept that things can be both good and bad at the same time. This kind of thinking can be helpful for making quick choices, but it can also lead to frustration and feeling stuck when things don’t fit neatly into one category.
Clinically Speaking:
Black-and-white thinking, also known as dichotomous thinking or cognitive rigidity, is a cognitive distortion where individuals perceive situations, people, or events in extreme, either/or terms without recognizing nuance or complexity. It is commonly associated with neurodivergent conditions such as autism, ADHD, and borderline personality disorder (BPD), as well as anxiety and perfectionism. This thinking style can impact emotional regulation, problem-solving, and interpersonal relationships, often leading to unrealistic expectations and difficulty adapting to change.
How Black-and-White Thinking Affects Personal Finance
When it comes to money, black-and-white thinking can create challenges in financial planning, spending, and goal setting. Viewing finances in extremes can result in impulsive decisions, avoidance, or feelings of failure when things don't go perfectly.
All-or-Nothing Budgeting
Individuals with black-and-white thinking may view budgeting as something they must follow perfectly, leading to frustration if they overspend even slightly. This can result in abandoning the budget entirely instead of adjusting and moving forward.
Impulsive Financial Decisions
Seeing things in extremes—such as thinking "I’ll never have enough money" or "I deserve a splurge because I’ve been good"—can lead to impulsive financial behaviors that don't align with long-term goals.
Struggles with Long-Term Financial Planning
If progress feels slow or not immediately successful, black-and-white thinking can make it difficult to stay motivated toward financial goals, leading to feelings of discouragement or giving up too soon.
Difficulty Managing Debt
Black-and-white thinking may cause individuals to view debt as either completely manageable or entirely overwhelming, making it challenging to create a realistic repayment plan. They may either ignore debt or become consumed by it, impacting emotional well-being.
Avoidance of Financial Complexity
Finances often require balancing multiple factors at once, but black-and-white thinking can lead to avoiding complex decisions—such as investments or retirement planning—due to the inability to see flexible or gradual progress.
Black-and-white thinking can make financial management feel daunting, but breaking tasks into smaller steps, practicing self-compassion, and recognizing progress over perfection can help create a healthier relationship with money. Adopting flexible financial strategies and seeking support can provide perspective and reduce the pressure of all-or-nothing financial expectations.
