I am facing this situation. H seems to think money grows on trees and with his surgeries last year, he only earned about $25K. I would sell one of the houses - I’d prefer to sell the big house that we live in, but H wants to die here… He doesn’t want to sell the other house, either, which is paid off and which one of our sons lives in rent-free. H wants to rent it out but I am averse to being a landlord. I would live there if we sold our current house; both are in the same town.
I would never reduce my retirement savings; I am only at 7% now and I am freaking out about how I will live when I am old. I grew up in a housing project and have nightmares of being a bag lady. Our “new car” is a 2006 and our other car is a 1994 so it would be hard to cut costs there. I have a Sunday newspaper subscription which gives me access to the paper on line for free during the week. We don’t belong to a gym, have Amazon, netflix or HBO. I do have cable and would like to cut that cost but I am really not tech savvy enough to do streaming. I have never even recorded anything on a VCR or DVR in my life. H cuts everyone’s hair and colors mine when I need it. I don’t go for manicures, pedicures, massages or facials. We eat out but no longer order soda, wine or dessert.
It’s hard to budget, though, with a spendthrift, ADD husband.
I did recently shop around for my auto and homeowners insurance and managed to bring all costs down and add an umbrella. I never had an umbrella before but with 4 young male drivers in my home, I figured it was worth it. We got a very good rate based on H’s having attended a particular college.
“I do have cable and would like to cut that cost but I am really not tech savvy enough to do streaming.”
This is where the kids come in handy. Get them to teach you even if it means also writing down step-by-step instructions for you. 
I would sell my house, car, couldnt pay for kids college, rent somewhere like I did before we made money.
“How would you live on half of your current income?”
To me the future state of the US and world economy seems rather uncertain. As such, for most of us living on not much more than half of our current income seems like a very sensible thing to do before our income drops. Living on half or 2/3 of one’s income does mean that you need to figure out what to do with the rest, which implies distinguishing between one time expenditures which will help down the road (paying off a mortgage, funding a 529) versus ongoing spending.
Our family income did drop rather dramatically recently, but fortunately we were prepared for this.
Since I posted the original question on the other thread…
This happened to me ten years ago, only it was even worse - on Monday I was making 3 times the salary of my husband, and on Tuesday I learned that my research site was being closed and everyone would be let go. (I got a decent severance package because I’d been working there for 22 years, but still…my D was a HS junior at the time.) I remember that our site director had tears in his eyes when he told us the news.
So here’s what we did: my husband marched into his supervisor’s office and requested a 20% pay raise (which helped, but it certainly didn’t make up for the loss of my income!) We quit saving for college (but that was okay, since we’d already been saving for 17 years.) I started looking for new jobs ASAP and eventually found something completely out of my field (which was really disastrous, in the long run, but it helped keep us afloat while D was in college.) There were times I worked two jobs as well.
We cut discretionary spending to the bone – no cable, no meals out, no vacations, nada. That being said, the only thing that really saved us was the savings we had accumulated when I was making the big bucks – my D was still able to go off to college because we’d been saving for it since her birth, and our emergency fund was pretty significant because we always lived below our means. I really don’t know what we would have done had it not been for our savings.
As I said – all this happened ten years ago. We still make half as much now as we did back then. Sometimes I wonder what life would have been like if I my research site had not closed; I had an awesome job working with colleagues I loved (not to mention an awesome salary – have I mentioned that enough?!) I know I am much more cautious now about spending and overly focused (at times) on my balance sheet.
No changes. Responded to the other thread. We never spent our income so we have a pile of money we’ll likewise never spend (charities be thankful when we are gone). It really matters what income you are upgrading/downgrading. I grew up marginal financially- too rich for free lunch and couldn’t afford hot lunch. Any changes would have tipped the balance.
I’m an outlier- went from “rags to riches” in reality. Most are somewhere in between (at least the CC crowd). Had hard work and brains to do it- made me different in HS as well. So much easier to be typical.