I did this recently with a new Mac Mini that I set up. MacOS recently added the ability to locate the home directories on any volume. There's a somewhat hidden

I did this recently with a new Mac Mini that I set up. MacOS recently added the ability to locate the home directories on any volume. There's a somewhat hidden feature too that if you drag the Applications directory onto an external drive it will move selected apps there (the larger ones like Pages, etc.); combine that with the option in the App Store to keep large downloads on a separate disk. So far it's been working quite well with the exception that VSCode does not seem to understand how to update itself if you keep it in the external Applications folder: every time it tries to update itself it just deletes itself instead. Moved it back into the /Applications folder and it's been fine.