Hard answer to find, and it is mostly personal for most. I am willing to share mine. I used to have 15K speakers, 3K preamp, 5K amplifier and so on....total cost of system around 25K. I downgraded with a smile, although I do admit that the smile came in after only 2 to 3 months as part of a ''reality check'' phase. I will not get into how I came to realize that I did want to get off, that's a whole other topic. Let's just assume that you do want off, but want to make it a painless as possible right? Here's My formula.
1. Get gear that LOOKS great.
There are many ways to get cheaper gear, and a lot of cheaper gear do sound pretty good. But I feel better if the gear happens to be great looking, so you can still be proud to diplay it (All audiophiles, while many won't admit it, love to diplay their gear). But the real reason is, it should look good to YOU. For my part, I went from a mega-buck Sonic Frontiers preamp and amp to an Audiomat Arpege integrated, arguably one of the sexiest looking unit regardless of price.
2. Get gear that sound good,but not at the top echelon of excellence.
This is hard because we have a habit of comparing, after owning expensive equipement that spoiled us. So....we must STOP ANALYZING AND STOP COMPARING TO THE PREVIOUS set-up, and think of the artist playing.
3. Listen to some cd's or LP's of the pre-audiophile days.
If you totally tripped on The Beatles's SGT Pepper album, or Billy Joel's The Stranger, or Pachelbel's Canon, or Vivaldi's...whatever, it should bring back great memories of when music was more important than the equipment it was played on (and especially what you were doing or where you were at that time). It did work for me! My first high school date was partly spent listening to ''The Best of Bread'' on a Pioneer SX-525 receiver, a dual turntable and some cheap housebrand, no-name generic speakers (wow, did it sound GOOD! back then... ) - in my mind, I have never encoutered a high-end system that could replay these songs as well as this system did that evening!! Joking aside, there is some truth to this...
Pursuing my downsizing, I went from magnificient 15K speakers to a pair of 2K Sonus Faber Grand Piano Home (going back to rule no.1 again, they LOOK great, and they sound good)Even my wife think they look beautifull - an easy feat with any Italian speaker really.
4. Take 10% of the expensive gear sold, and buy something sensible and practical - don't laugh - a new dishwasher or refrigirator will bring a tangible proof to your family that all is not bad in downsizing! A weekend getaway will also do wonders...
5. Lastly, get sensible but quality equipment for the rest of the system - Audioquest type 4 speaker cable (cheap but still ok),some discontinued Wireworld Equinox interconnects, DVD player than can do double duty (any of the flagship Sonys will do, the old 7000, 7700, and of course the superb 9000ES. (I'm selling mine as I am simplifying further to a dedicated, simple-box cd player.
And voilĂ , you have downgraded ''almost'' without pain and kept your dignity !! Of course, even a pair of Grand Pianos can be considered expensive and not really a downgrade for some. The important thing is, if downgrading is a path to follow, it's always possible to do so. Heck, you can always goo back to ''it'' in a few years if you want to. These are only toys after all...
Hope this made for an interesting read...Good Luck!