If you’re like most people, potential happiness is the incentive behind much of what you do. When you’re looking for a new job, you’re seeking a happier way to spend your work week. If you have a long-term partner, part of your love for that person is likely tied up in the sense of happiness you feel when you’re together.

Happiness doesn’t mean that nothing ever goes wrong in your life, or that you have everything you want. Happiness is more long-term; happiness is a way of seeing your life. In most cases, being optimistic, yet grounded, is a fundamental component of lasting well being.

Why is being optimistic important?

When you feel sad or depressed, you tend to look at the world through murky glass—in the presence of the things or people that once brought you joy, you only see their diminished light. Depression can also hover over your visions of the future, making things seem hopeless.

Unhappiness can distort your view of reality; thinking optimistic thoughts can bring things back into perspective for you. If you have a mindset of optimism, the less-than-happy thoughts that characterize unhappiness have less power to bring you down.

If you’re optimistic about something, you spend less time worrying and anticipating bad results. When you stress less, you’ll likely feel more confident and at ease when the event comes to pass. Optimism brings about a happier reality.

For example, if you’re anxious about a presentation you have to give and tell yourself things like, “I’ll never do a good job” or “no one believes I’m good at my job,” it’s more likely that your nerves will affect you during the presentation. On the other hand, using positive adjectives to describe yourself can make a big difference in how you see others and carry yourself at work.

When does being realistic come into play?

Optimism is associated with better health and greater happiness; however, being optimistic without limits can have drawbacks. If your optimism is boundless, you might put yourself in unnecessarily risky situations, like smoking, or you might spend more money than you have.

Adding a little reality to your positive expectations of the future can make all the difference in your journey to happiness. By combining optimism and a realistic mindset, you can make wise, constructive decisions that set you up for a future you feel good about.

One of the hallmarks of anxiety is expecting catastrophic results. Being realistic can deflate your fears. If you commit to trusting the facts of a situation rather than your negative emotions, you can often come to see that your imagination has gotten the better of you.

For instance, if you struggle with social anxiety, you might avoid parties or group dinners because you’ve built up so much negative anticipation before the event. A healthy of dose of realism can sometimes nudge you a little closer to real happiness: it’s very likely that the event you’re worried about doesn’t have the catastrophic power your anxiety has lent it in your mind.

Can being optimistic and realistic help me find peace?

One building block of anxiety is investing your sense of self-worth in the outcome of future events—if a meeting at work goes well, you’ll feel valuable in your career. If you’re asked on a second date, you’ll feel worthy of someone else’s love.

Being optimistic means feeling good about yourself without the conditional “if.” When you’re optimistic, you trust that things will work out even if a date doesn’t go well or if you make a mistake in your job.

Being at peace also means giving yourself realistic expectations—instead of trying to be someone you’re not, you can set realistic, personal goals to be a better, happier you.