Downsizing is challenging, but it is extremely liberating to rid yourself of items that are really just clutter. I think a lot of us grew up with a fear of not having enough, or somehow running out of what we need, and that translates into a need to hoard.
However,everything in your space is energy, and affects your personal energy. It makes a lot of sense from a personal happiness standpoint to get rid of anything you don't either love or actually require. Having less also simplifies your ability to clean, find things and make decisions.
I personally love a very clear and open concept way of living, so I keep any bits and pieces I actually need tucked away. My method was to buy 2 entertainment units from Ikea with front doors that I love. Each cupboard hold 6 rather large boxes (you can get them at London Drugs with lids for $4-$10 each). I have six cupboards total, and there is no way I can use up all that storage space.
Label the boxes and shut the cupboards. Boxes can contain anything you don't want laying around. Extra place setting for when company comes, candles and supplies for work, vitamins and suppliments, Cards, letters and personal items you don't use every day, but have sentimental value, pet toys that are in rotation, spare parts like lightbulbs, batteries, tape, stamps etc.
This organizes any clutter, so that even when you open the cupboards, all you see is 6 tidy, colorful boxes. Push the unit against a wall, and minimal space is used. The top of the unit can be used to display photos, flowers, keep your keys etc.
I've also used the same concept in really small places to store items, but then put mirror on the outside to reflect light and make the palace look bigger, while using the top of the unit as a kitchen island for food prep and a table to eat on.