I'm wrestling with downsizing also. I am a collector and hoarder of USEFUL stuff. It's incredible challenging balancing act. I like having stuff "on hand," I like the discounts and convenience of buying in bulk, or 2nd hand which means "when it's available, buy it." I like having supplies, a pantry, a big closet full of clothes, a filled tool room, etc. I also like space. In 10 years I've downsized from 3600 s/f, to 3000, to now 2000, and soon moving to 1600. It's very difficult.
I absolutely hate not having space to store stuff, and needing to run to the store for a box of nails or a quart of oil or can of corn, etc. That's just not efficient.
First, is being space efficient. Much of it is in how the size is laid out. A smart layout can add 50% and a poor layout can subtract 50% from the useful s/f.
Next, is eliminating "projects" and stuff you just have not and will not use. Have an honest dialogue with yourself. I've moved some junk 4 times. I'm going to get rid of it. Donate all the clothes you don't use. I have to do all this imminently.