To relax and enjoy yourself.
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To relax and have fun, free of rules and appearances.
When you let your hair down, you drop the formal front and enjoy yourself.
It is often said to someone who needs to loosen up and stop being so serious.
"Unwind"
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To gradually relax and reduce stress, often alone or quietly
"Kick Back"
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To relax casually without doing much, usually at home
"Let Your Hair Down"
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To let go of formality and enjoy yourself freely in a social setting