Personally, and without contradicting “the” preferred manner, i am a fan of taking the opportunity for a real cleanup.
that means longer, but yes: everything (data only) on an external drive.
then reinstall apps from scratch (latest compatible versions). It may allow you to realize yoo no longer need to occupy real estate on your internal drive for an app you have not used for years and no plans either to use it!
then, same reality when moving back your data: your 76 copies of same picture may not be necessary. Other data may live happily on an external drive or in a dropbox or elsewhere. Data from your wife’s profile (and that profile itself) may no longer be necessary now that she has it on her own mac (or if you replaced her 🤣)….
More importantly, you are limiting risks to bring back corrupted data or programs to the new mac 🤷🏽♂️
Yeah, that means a few hours +++ but it may be a better investment than later having to cope with lack of space, an unidentified issue with a culprit you brought back….