How to Recalibrate Your Personal Finances at Any Income Level

Let’s say you’re lucky enough to be born into a wealthy family. They take care of all of your needs and fulfill an awful lot of your wants. You were always the person with the nice clothes, the latest devices, the expensive games, the nice car, all paid for by mom and dad. You go to college, paid for by mom and dad. Then, suddenly, you’re out on your own. You’re making a decent living, but it’s hard. All of the nice stuff in your life before now is out of reach and everything is painfully expensive.

Let’s say you got a great job coming out of college and you nailed it for several years. You made a very good salary and you became accustomed to spending accordingly. Then, suddenly, things went in a new direction. Maybe you fell out of that career for some reason. Maybe you began to question whether you wanted to keep doing this or not. Maybe you had a major personal life change. Now, suddenly, your income is a lot lower. You’re making a decent living, but it’s hard. All of the nice stuff in your life before now is out of reach and everything is painfully expensive.

Let’s say you simply realized that your current financial life is unsustainable. You spent your 20s and maybe your 30s spending lavishly and enjoying a lot of travel and luxury goods and suddenly you’re realizing you don’t really have anything saved and actually have a lot of debt. You have to cut back and make some changes. You’re making a decent living, but it’s hard. All of the nice stuff in your life before now is out of reach and everything is painfully expensive.

These stories all in the same place: people are recalibrating. They’re learning how to survive on less spending money than they used to.

Recalibration can happen to anyone. It can happen to the kids of millionaires who are suddenly cut off from the bank of mom and dad. It can happen to people with a great job who suddenly find themselves jobless. It can occur when someone decides to leave a well-paying job to become a stay at home parent. It can happen much like it happened to me, with a realization that one’s financial life is unsustainable. Sometimes, recalibration happens by choice; at other times, it’s forced upon you.

No matter what, it’s not fun.

It can be easy for people to say “That’s not really a problem,” but no matter what your original spending level, a significant cut in your spending levels creates life difficulties. It is not easy for anyone to recalibrate. We’re creatures of habit. That’s why things like losing weight are so difficult for so many of us. Even among the most spontaneous of us, we’re still creatures of habit and many of those routines are very hard to change.

Here is my best advice for anyone currently recalibrating, or who might see recalibration coming in their near future.

Take a “Glass Half Full” Approach

It is very easy when you’re recalibrating to find yourself focusing on the downgrades and obsessing over what’s missing in life. After all, what’s changed in your life is the recalibration – you’re spending less than you used to and you can’t help but focus on it, right?

Rather than focusing on how the glass is half empty, focus instead on how the glass is half full.

Whenever you catch yourself feeling miserable about recalibrating, consciously recognize what you’re doing and how it doesn’t help, and then consciously start thinking about all of the things you do have and all of the things you could do.

You might find yourself dwelling on the fact that you can’t eat out like you used to, yet there’s nothing stopping you from making some of your favorite foods at home a lot cheaper than before.

You might be upset that you can’t just go shopping at the drop of a hat, but aren’t your closets and shelves full of stuff that you love that’s just gathering dust? You have infinite things already in your possession that don’t get the attention they deserve.

You might feel like your social life is suffering because you can’t go out all the time any more, but there’s no reason you can’t call someone up and invite them to do something that doesn’t involve shelling out cash. A good friend is one you don’t have to spend money in order to spend time with them.

You have a home to live in. You have tons of possessions. You have people in your life that love you. You have your health and your energy and your life. You have access to more entertainment options and more knowledge than anyone who has ever lived. You have so much.

Focus on that, not on the little inconveniences that come from recalibrating.

Dive Deep into Low Cost Passions

One of the things that really saved me during my own recalibration was that I really loved to read. It was a passion that had been somewhat derailed into more of a desire to just collect books and stuff my shelves with them.

I made a concerted effort to spend less time shopping for books – effectively reducing that to zero for a while – and more time actually reading. If I didn’t want to read any of the abundant books already on my shelf, I just went to the library to find other ones.

What things do you enjoy that doesn’t require a big additional expense?

Perhaps you love to go hiking. Rather than obsessing over the latest hiking gear, just get out there and start making a list of trails you’ve explored.

Perhaps you love clothes. Rather than spending hundreds on new clothes, start trawling secondhand shops for things that are huge bargains that look good on you, or figure out how to modify some of the stuff you already have for new looks.

Perhaps you love good food. Rather than going to tons of restaurants, start learning how to actually make things you love in your home kitchen.

There are essentially infinite free and low cost things to dive into out there. Spend some time thinking about things you actually really love doing in your life, figure out which ones don’t involve big outlays of money (or can be done in a way that doesn’t involve a lot of money), and dive into them.

The purpose is to find ways to fill your life with joy and pleasure without exchanging a ton of money for it. One of the things that forces people to recalibrate is that they found themselves in a routine where they were constantly exchanging money for enjoyment and pleasure, and that’s a key cycle to break. You don’t have to spend money to have joy and pleasure.

Cut Back Hard on Things That Are Relatively Unimportant – Learn to Love the Store Brands

Here’s a strategy to try: the next time you buy any household product, buy the store brand version instead. Do it for everything.

Then, over the next month or two, see if you notice anything actually lacking in terms of what you use them for. Does the store brand laundry detergent get your clothes clean? (Hint: it does.) Does the store brand dishwashing detergent get your dishes clean? (Hint: it does.) Does the store brand ketchup taste basically the same as other ketchups? (Hint: it does.) Do the store brand trash bags convey your trash out to the curb? (Hint: they do.)

What you’ll find is that you’ll notice and be bothered by maybe 5% to 10% of the changes, but the other 90% to 95% of the store brands just work perfectly for your needs.

You can do the same with all kinds of stuff. Cancel all of your cable and streaming services except for the one you actually use the most. If you find you’re really missing one, bring it back (or find a suitable replacement, like Sling). Trim back your cellular plan to match what your actual usage has been over the last year and see if that works for you.

The best strategy for recalibrating a lot of your spending is simply to cut back hard, then restore only the things you actually really miss – and you’ll find that you don’t miss a lot of it. This strategy works because you know it’s okay to restore things that you genuinely miss, and the things you don’t become a source of savings.


This is a great compliment to the “glass half full” strategy. Volunteer work can really remind you of the abundance you have in your life and leave you appreciating what you have much more; furthermore, it’s an activity with minimal personal cost.

Simply sign up to volunteer for some cause that you care about, ideally on a local level so you can really see who you’re impacting. Sign up for the food pantry or the clothing pantry or a soup kitchen or a Habitat for Humanity house. You don’t have to do it forever; just take it on as a 90 day personal challenge.

As you’re there, be aware of the difficulties and challenges that the people you’re helping out are facing in their lives. Those challenges are often tremendous, and the people struggling often have few resources with which to handle those challenges.

The experience of volunteering at the local level left me with an incredibly powerful sense that my life was actually really abundant, even at moments where I felt the bite of recalibration. It was a firm reminder of how much I have.

Find People Who Don’t Need to Spend Money for Fun

Look for people in your life who find enjoyable things to do without spending money and actively start spending more time with them. Hang out with the people that like to have movie nights at home or have lots of dinner parties and potlucks and game nights rather than the people who have to go out to have fun.

If you don’t have people in your life like that, seek them out. Go to lots of community events – they tend to draw people who don’t want to spend, spend, spend to maintain their social network. Check out Meetup and go to things that seem interesting. Do the same with your library’s website and your city’s website and things in your community Facebook groups. Actually go to things and participate in them, especially if they’re free, and make an effort to talk to and get to know people there.

Yeah, you won’t click with everyone. That’s fine. The goal is to meet a few interesting people and then, over time and repeated participation, build those relationships up. You’ll find that socializing and friendships don’t have to come with a price tag.

Consciously Dig Into Your Media Collections

Give yourself a simple challenge along these lines.

“I’m not subscribing to a new streaming service until I’ve watched everything on my watchlist / saved list on this service.”

“I’m not buying a new book until I’ve read everything on my shelf or traded away / sold everything I’m not going to read.”

“I’m not buying a new board game until I’ve played all of the ones in my closet at least once, or traded them away if I have no interest in playing them again.”

You get the idea. Whatever form of media that you collect, stop collecting more of it until you’ve gone through what you have now and curated and enjoyed it. By curating, I simply mean getting rid of things you have no intent of reading or watching or listening to or playing with in the future.

This is my challenge in 2020 with my collection of board games, for example. I’m not spending money on a new game until I’ve played everything on my shelves at least once or, if I’m not willing to play it, trading it off for something else that I will play.

This is a great way of recalibrating the balance in your life between collecting more and more stuff that you won’t get around to actually enjoying versus actually digging into your collection to figure out what it is you actually enjoy and refining your collection to match it.

Center on a Inexpensive Self-Improvement Goal

One surprisingly effective tool for recalibrating your spending is to dedicate yourself to a particular self-improvement goal that doesn’t require a ton of additional spending.

For example, you might focus on adopting a healthier diet centered around making food at home. You might focus on getting stronger by building up your core strength through calisthenics. You might focus on learning a new programming language using online resources. You might focus on learning a new spoken language using Duolingo or other free resources.

The point is to give yourself a clear self-improvement goal that’s centered around daily activity. “For the next 180 days, I’m going to spend 30 minutes a day doing bodyweight exercises to strengthen my core and tighten my gut.” “For the next 180 days, I’m going to prepare and eat one vegan meal at home each day.” “For the next 180 days, I’m going to spend 45 minutes learning French.” 180 days is a good target for a goal like this because it will often begin to be a habit, one you stick with even after the 180 days is over.

A low-cost self improvement goal gives you something to focus on that’s distinct from spending and gives you something to take pride in that’s not related to spending, either. You’ll take pride in the effort you’ve put forth, not in something you merely bought, and that’s a big difference. Plus, you’ll be filling up time and mind space with something that’s not related to spending money.

Think of something else you want to improve about yourself and commit to a goal of 180 days where you take daily activity toward that improvement.

Consider a Big Downgrade

Most of the above suggestions are ways to help you deal with lots of little changes in your life, but sometimes it can be bigger just to execute one or two really big changes.

Have you thought about moving to somewhere less expensive? Have you thought about selling off your car and relying on either one fewer car or on mass transit?

Those two moves, right there, can make a gigantic financial difference when you’re recalibrating, but they often don’t pop up on people’s radars. They don’t seriously think about selling the house – instead, they stick with it until it’s about to be foreclosed on. They don’t seriously think about selling the car until the repo man takes it. They don’t consider how selling those things off now can not only alleviate some headaches but also put some money in their pocket.

Consider it. Would it be a good move to move to an apartment, clean out your house, and sell it, paying off the mortgage in full and giving you enough cash to pay off a lot of other debts? Would it be a good move to move to a smaller apartment, maybe one closer to work that allows you to use mass transit? Would it be a good move to sell off your car and just use mass transit for everything (or get a Lyft in a pinch)?

A single big move like that can change everything for the better. Give it some serious thought.

Final Thoughts

Recalibration is hard. It’s hard whether you’re rich or poor or somewhere in between. It means giving up things you once enjoyed. It means facing some hard facts about your life.

In the end, however, recalibration can lead you to a more sustainable life going forward, one that you can be happy with over the long run.

The trick? Next time around, don’t let your lifestyle inflate with your income growth. Instead, keep your lifestyle the way it is and use that money to build long term stability so you don’t have to painfully recalibrate when things don’t go the way you expect.

Good luck!

Trent Hamm

Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.