How much have you done with your town? Is your layout cramped because of house placements, trees, PWPs, or maybe even rocks? I used to think my first town was very cramped because of where I placed things and how the river was, but once I cut down trees and planted some more, it didn't feel so bad. Unfortunately, rock placement was still an issue, along with several houses, including my own, so I ended up resetting. That was my very first town, and I do regret resetting it a little, but not too much. I would say it depends on how much you've done with your town and what exactly it is that's making you feel like it's cramped. If it's trees and/or PWPs, you can change those quite easily. If you've spent a long time in your town and achieved a lot of things, you should ask yourself if you'd be okay to do those things again. You can save your items and money, but maybe you have a lot of badges and you wouldn't want to earn them all again, so maybe you shouldn't reset. If those kind of things aren't an issue, you should probably reset.
And hey, if you're worried about screwing up if you do reset, look around your town and plan things out. You can always place a custom-design sign or something down to save a spot for a future plan. As long as it's a cheap, destructable PWP, it works just fine.
I would be happy to hold onto your items if you do reset. I'm waiting on someone to hold my items before I reset anyway, so I'll be able to hold onto them for a few days no problem.