Yeah, it is complicated, but the 8GB doesn't magically turn into 16GB on the new M1. Yes, the management is better, more efficient, the memory is faster and used for more things... but 8GB is still 8GB.
Here's a screenshot of my entire Activity Monitor screen. As you can see, only Safari (with several tabs, including Prime Video) and Firefox with just one or two tabs, is what is causing my 8GB machine to suffer with yellow levels of RAM compression. This is not always happening, but it happens. And when it is green, it is pretty high as well, using a big amount of Swap memory (which uses the SSD and we all know what happens if you're constantly writing gigabytes of data each day on a rather small SSD).
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In my case, honestly, I'd like to get the redesigned MacBook Air in 2022 (because this year we'll only see the MacBook Pros redesign, according to analysts), but that means being 2 years with a machine I won't be 100% satisfied with. Also, I am not sure if in 2022 I will have the income to sell this and get the new one. Also, maybe the new MacBook Air doesn't come with a 3nm M3 but rather a slightly improved M2, a minor upgrade. And being the first model after a complete redesign, there may be flaws like the 2016 MBP keyboard, or the 2016 flex cable, etc. I'd rather wait a few iterations of the new redesigned MacBook Air, and get the machine at the best moment.
If I want to wait 3 or even 4 years with this machine, I want to be happy with it. And that's why I am returning my 8GB/256GB MacBook Air and getting a 16GB/512GB MacBook Air.
I finally setup my 8GB/256GB base M1 Mini yesterday. My experience has been similar to yours. Memory pressure was yellow quite often with swap reaching 8GB+ at times. I also had some time in red memory pressure territory. At idle the machine was high green on the memory pressure graph.
For applications, I was using PyCharm IDE, Safari, Edge, Outlook and Affinity Designer. Most applications seem to be Universal binaries already. I am running two 4K LG displays, both having active applications running simultaneously, as opposed to having a single screen with one front facing application in which background applications would probably be likely candidates for memory compression.
I am also running OneDrive with two accounts, personal and enterprise. I have over 300GB on each, and OneDrive is currently an Intel application still, so that might have had some negative effect.
Even when memory pressure was in the high yellow, the Mini was still surprisingly responsive.
My plan is to only keep this Mini until the next one is released (hopefully configurable to more than 16GB RAM). I have the luxury of having other machines to use which will allow me to offload some work to them. If I was going to plan on doing everything on one machine, I would definitely need 32GB RAM, so even upgrading to 16GB would still be a bandaid approach for $200 extra in this 1st gen M1 Mini.
After watching all of the YouTube videos, and some of the posts here, I was honestly surprised at how little it took to get the memory pressure into the high yellow and red range.
If I had any intention of keeping this Mini as my primary machine for more than 6 to 12 months, it would be going back and I would be getting an upgraded model with more storage and more RAM.
After having some time with my new M1 Mini, my general recommendation would be to get the 16GB model unless you are sure that your usage is very light, or if this is only a temporary machine until the next higher specced models are announced. Between RAM used by the OS and GPU, there really is not a lot left for your applications. The unified memory architecture of the M1 should not be used as an excuse to starve it of RAM, since working off of swap deprives it of the extra memory it could have used to do the job it was intended to do.
Despite the low memory spec, the M1 Mini is still a fantastic machine and very responsive. I am looking forward to pushing the base Mini to its limits (and beyond) until its successor arrives.