Follow the causal chain from top to bottom.
We self-handicap because we need to protect our facade. We can nullify potential threats by creating a narrative that pre-emptively explains any future failure.
Explanation (based on an excerpt from the book)
Why we self-handicap
As an illustration of self-handicapping, consider Lucrezia, who says that she does not want to date, but only to dispel the Insecurity about not being good at dating. Now she takes it one step further and adopts an unattractive look (to show that she does not want to date), thus making it less likely that someone will ask her out. She is handicapping her chances of finding a partner, but it makes her feel better because it is Reinforcing her manufactured belief that she never wanted a date in the first place (it is a Vivid demonstration to herself, as much as to others, which makes her belief more real), comforting her Insecurity about not being asked. Her ego is protected because she can create an internal model in which dating is unimportant to her, and that, anyway, the way she dresses is why she does not get much male attention, not anything more fundamental.
Self-handicapping is a particularly self-destructive Nullification tactic: we can voluntarily reduce our chances of success just to protect our Facades: we can turn to alcohol and use it as an excuse for failing at work, or claim to be too busy to write our novel while actually seeking activities to ensure that we are too busy (486); we seek out and latch onto something that prevents us from asking out the object of our affection (we take a trip, perhaps) because we know how badly we would feel if we tried and failed (487). Self-handicapping allows us to externalize failure; we might find reasons to avoid studying for an exam so that we can later say, “well I didn’t fail because I am stupid; I failed because I did not have time to study.”