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My base M1 Air that's been in daily use as my main laptop to take back and forth between home and my classroom is around half full and has been functioning perfectly for me. It gets used for office productivity, light programming, and light 3D modeling and the storage on it has never been an issue.
 
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I used to use the “almost flush” USB-A drives on my Windows computers. They could hold a TB of data. Shame they do not make the same for USB-C drives.
 
My M1 MBA had around 100GB free, when I swapped it out for an M4 512GB. The M4 currently has 116GB used. In both cases that included a Windows VM running in Parallels. But we aren't supposed to store any data locally on our work devices, it should all be on network drivers or Sharepoint, where it is automatically backed up.
 
I guess it totally depends on your use case. When I had my M1 MacBook Air, and the three or four prior machines, they all had 256GB of storage on. That's what I'd consider the minimum.

Most of what I do is just surf, casual editing in Word, a bit of Photoshop whilst listening to music in Apple music and talking to people via Facebook Messenger or WhatsApp. I routinely had about 180GB free.

I do have an external Samsung 500GB T5 drive (and subsiquently two 1TB T7's on my Mac mini) - so if I did need extra space, lets say for video editing, I'd just plug that in. But as it's not often I do that, it was never a bother. For my current MacBook Pro, which I use as a media centre computer when we're on holiday in our camper van, I have another 500GB external SSD that houses our movies and tv shows library on. I have an Anker hub that it's plugged into, so when we want to watch something on our TV, via the MBP, I just plug in one cable which charges and connects to the hard drive.

What I would say is it is perfectly easy to get by on the base storage even with minimal amounts of effort being put into having to manage such a small amount of space.
 
Easy. Buy a 256GB USB stick for 10 bucks. Put all your precious memories on it. Pray that it does not break before you finally upgrade your Mac with hopefully more internal SSD storage 🙃.
 
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I just purchased the 256 GB M4 MacBook Air to replace my M1 iPad Pro. I was having some buyer's remorse regarding the hard drive. However, I also have a 16-inch M1 MacBook Pro with 1 TB of storage. I think the 256 GB for my use case (mostly web browsing, streaming, and Angry Birds) will be fine.
 
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I had a 2015 MBP (bought refurbished in 2017) with a 256 SSD for 8 years! At times it was a pain - especially when it was my main creative production machine, but in 2018 I moved to an iMac and now I'm on a Mac mini so the 256 wasn't a problem. Just this past weekend I bought a brand new 13 M4 MacBook Air with 256 - no regrets. I only use my laptop for emails and administrative work - so I barely use any drive space. It all depends on your usage - for me it works.
 
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