nginx's memory footprint is tiny for what it delivers. A common pattern I see for homelab and self-hosted stuff is a lightweight bastion VPS in a cloud somewhere proxying requests to more capabile on-premise hardware over a VPN link. Using a cheap < $5mo means 1GB or less of RAM, so you have to tightly watch what is running on that host.
1 GB should be way more than either should need. I run nginx, unbound, postfix, dovecot plus all the normal suff (ssh, systemd, etc) for a Linux system on a VPS w/ 500MB of RAM. Currently the system has ~270MB used. It actually has 1GB available due to a plan auto-upgrade but have never bothered as I just don't need it.
1GB for a VPC that runs an HTTP load balancer/reverse proxy and a handful of IPsec or Wireguard tunnels back to the app servers (origin) is overkill. You could successfully run that in 512MB, and probably even 256MB. (That's the scenario described).
What needs to run on this that's a memory hog making 512MB too small? By my (very rough) calculations youd need 50-100MB for kernel + systemd + sshd + nginx base needs + tunnels home. That leaves the rest for per-request processing.
Each request starts needing enough RAM to parse the https headers into a request object, open a connection back to the origin, and buffer a little bit of traffic that comes in while that request is being processed/origin connection opens. After that you only need to maintian 2 connections plus some buffer space - Generously 50KB initially and 10KB ongoing. There's enough space for a thousand concurrent requests in the ram not used by the system. Proxying is fairly cheap - the app servers (at the origin) may need much much more, but that's not the point of the VPS being discussed.
Also worth noting that the cheap VPS is not a per-project cost - that is the reverse proxy that handles all HTTP traffic into your homelab.
