Why should you simulate different spending levels? Spending decisions quickly become habit, and normalized to the point where we fear any reduction will ruin our lives. The Stoics, among others, recommend practicing the fates we fear. Preparing for possible changes builds resilience, with opportunities of discovering preferred states. In other words, you might end up enjoying parts of a lower cost lifestyle. You can jump right into the most extreme scenarios, but I recommend looking at $5,000 increments:
You will realize, as I have, that certain levels are easier to reach with different reductions. In my case, housing isn’t as pleasant to reduce, until I make a significant change. Conversely, I wouldn’t add much to housing if I spent more. I’d rather fund experiments and exploration, which I’ve categorized as part of shopping and entertainment. Exploring the examples, I preferred simplifying most of my shopping and groceries. Not only did I save money, but time and energy freed from constantly searching, selecting, and managing purchases.
After deciding how you would live at different spending levels, it is important to consider how much you want to work to maintain your current spending. Would you reduce spending to work less often? Maybe retire earlier?