This is the mantra I keep repeating to myself these days, mostly regarding my interactions with my children. But it also works well for work, marriage, extended family...
Outside of a few notable exceptions involving safety, there is nothing bad that will come for not reacting negatively to something my kids do or say. "Bad" (i.e. not what I want) behavior is not an emergency. There is time to step away, take a breath, think it over, before yelling or criticizing.
The other part to this is to remind myself that they are not doing it TO ME, even when it really really feels like it (i.e. when L hits me and calls me stupid). They are just acting out their feelings in the ways that come naturally to them.
I really committed to this yesterday, in a very intentional way, and it was immensely helpful. I let a lot roll of my back and it stopped the usual escalation. If left to their own devices, they will calm down and distract themselves with some activity or another and eventually behave differently. If, however, we keep criticizing and disciplining, there are more and more bad feelings all around.
Its not that we don't give consequences. I firmly believe in them. But 1) pick battles, 2) make it quick and unemotional i.e. you were throwing this toy so we are taking it. no you cannot have it back today. goodbye. and 3)move on myself (don't keep harping on it, or being grumpy, move on to the next activity).
All of this is easier said then done, and sometimes it just doesn't work, they keep acting out until I crack or the bad mood lasts all day. Its not perfect, but its a good intention to start with and for a back-up, there is wine.