How much isolation is actually useful when a few small apps share one VPS?

I’m planning to put a couple of small apps on one vps, and I keep going in circles over how much to separate.

Right now I’m leaning toward one caddy instance, then a separate compose file and network for each app. The database part is where I get stuck. One postgres container with separate users and databases seems simpler, but separate containers would be easier to move or break without taking everything else with them. How do you handle this on a small setup? Has the extra isolation ever saved you, or did it mostly give you more stuff to update and back up?

I’m not looking for a host. Just trying not to build a tiny corporate data center for two apps

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