Best setup for Macbook M2 Pro, 16gb RAM, 1TB SSD

You can do that, I do because there isn’t enough room on my Mac internal storage. You did not say which Adobe application you are using, but there are some things you should remember if you’re going to keep scratch/cache on an external SSD.

You should always remember to connect the external SSD before starting the application, because if the SSD is connected after starting the application, the application might switch to the internal storage.

If you use Photoshop, set the external as the primary scratch disk and internal as secondary. That way, if the external SSD is conneced, Photoshop uses that first, and if the SSD is not connected, Photoshop will use Mac internal storage.

If you use Premiere Pro or After Effects, it’s very important to connect the external SSD first, because if you start either application and the designated Media Cache volume is not there, it’s going to revert to the internal storage, then you’ll have to remember to go into Preferences and set it to the external again.

To be a useful scratch volume, the external SSD should have between 500GB and 1TB of unused space. You might get away with less than 500GB if your files and projects are lower resolution.