If you redesign the upper floor, please remove the bedroom from the south side (assuming the terrace is located on the south side) and rather give the children's rooms the nice south side. Bedroom and dressing room to the back, where Child1 and Child2 are now, children's rooms on the sunny side.
You want to save square meters, but the ground floor should remain as it is. Then are you planning a recessed top floor? That is not exactly cheap either, and I wonder if you will achieve the desired success with it (namely to be significantly cheaper). In my opinion, the ground floor must also be slightly reduced, and then the question arises whether the straight staircase can be kept – it really takes up a lot of space.
Don't get me wrong: the floor plan can be worked with, but you mainly want to become smaller.
Before everyone starts tinkering here: please clearly state by how much smaller the overall design needs to be and whether a recessed top floor is even allowed in the development plan and whether that is what you want.