A friend of mine suggested that I get rid of my 18" rims and go with a smaller size. My question is what size would e better then the 18's that I already have without having to worry about backspacing and such?

 

Smaller rims will give you more side wall of the tire meaning more grip at lower pressures. Also the larger rims the more expensive the tires are (generally speaking)

 

Backspacing is a worry regardless of rim diameter.

15's would have the best tire prices, but there may be clearance issues and tire mfg's seem to be moving away from tires in those sizes.
16's would not have the caliper issues of 15's, but may still have issues with brake kits and some aftermarket steering components.
17's are pretty safe for aftermarket steering and brakes, but tires are more expensive than 15's/16's.

So, do you have any plans for running a bigger brake kit? Or components with bigger TRE's or that need extra clearance inside the rim? Do you have fender clearance laws that would preclude a 4.00 or less backspace? Are you dead set on a certain tire that is not made in a specific rim size? etc.