Hi. I tried this but the 'not enough space is still there eventually, it's time to save up for a 2TB SSD:
I choose (I had to format it again to try this non-default Time Machine setting), when you set up a drive for SSD (I chose not to encrypt the backup since nothing's that top secret), set it first to custom not 'None' when it comes to the disk usage setting but keep the limit at the drives maximum (that circle things wherein you can adjust the space Time Machine uses).