For those self-hosting a lemmy instance, what hardware are you using? I am currently using a small Hetzner VPS. It has 2 vCPU, 2GB RAM and 40GB SSD storage. My instance is currently just in testing with me as the only user, but I plan to use it for close friends or family that may want to try this out, but might not want to sign up for a different instance. My CPU and RAM usage is great so far. My only concern is how large the storage will balloon to over time. I’ve been up for ~20 hours and it’s grown to 1.5G total volume since.
I don’t know what part of the world you’re from, but $5 for that sounds like a rip-off. For example take Netcup (https://www.netcup.eu/vserver/vps.php) which is hosted in Germany (I have my server there).