So I'm making my first ever overlay and came to the realization that my canvas was way to big,,,, issue is that the picture is basically done now and resizing absolutely murders it, any tips?

You could try Waifu2x. It's intended for upscaling small images without losing quality, but maybe it works in your case?

How do you downscale with Waifu2x? Can't seem to figure it out

Try upscaling to reduce the distortion, then downscaling and see if it works? That tool is meant for upscaling only, so there's no downscaling option.

welp, this is what i ended up with

Doesn't look that bad to me :D