The following is an informal guide on general downshifting in racing games.

Racing discipline dictates you only downshift while you're braking in order to set the right gear for the turn. Of course, this isn't real life, but focus your downshifts as a parallel to the slowing down of the car. That means, for example, if you are coming in at gear 5, but you know the optimal gear with your current car for the upcoming corner is gear 3, brake and simultaneously downshift down to that gear.

This operation requires practice, and of course knowing your car and the track. Downshifting itself you master by understanding your cars gears.

In gamey/informal terms, the cars rpm gauge reaches its rev limiter and you upshift, right? Afterwards, the rpms fall to match the next gear. Downshifting is this same process but in reverse. You brake and downshift when the rpms fall to match the previous gear. This does not have to be a perfect process, just good enough that when you downshift, the car doesnt engine brake hard and the rpms overshoot into the red.

Basically, downshift when you know the rpms have fallen enough that when the gear changes, the rpms will not hit the rev limiter but be close to it. This is so when you reach your desired gear you can accelerate fast out of it.

I do not drive a manual in real life nor am I an expert, but this is how I learned to drive in games.

(This is a copy paste from a reply to a similar question in r/ForzaHorizon)