Anything above a 0.2 mg dose of finasteride reduces nearly the same amount of DHT; most likely all side effects related with finasteride are directly due to the lowered levels of DHT. Thus, reducing dosage to anything above 0.2 mg will most likely not have a positive effect with respect to side effects. Theoretically, you would have to reduce dosage to below 0.1 mg to lower the potential risk of side effects and at that point you will most likely also be reducing the positive effect of the drug simultaneously. However, you might be a lucky one and reducing a smaller amount of DHT might still be enough to have a positive effect on your hair loss.
Now this is all theoretical and not concrete. It is possible that consuming a higher dosage of finasteride the drug itself, and not just reduced levels of DHT, cause some of the side effects. In that case, reducing the dosage would also reduce the risk of side effects.
In any case, since the difference in reduction of DHT between 0.25 mg and 1 mg is so small, its still a good idea to reduce dosage. At least you will be saving yourself some money while still getting almost the same benefit as taking the recommended dosage.