> To do a decent PCB layout you'll need to use very small passives in order to get the placement right.
0402 (inches) is small but doable. They really start to feel like grains of sand at that point.
But I personally stick with 0805 and 0603 when doing my own board layouts. I can't say I've ever felt space constrained. The placement of decoupling capacitors can be a few mil off, and in fact the "extra space" for placement helps your tweezers anyway, so you don't really want to push everything so close together.
Especially for hobby projects, I don't think anyone is really in the business of counting up the savings of 0.01" in the hobby world. Like, how small are you actually aiming for, and is it really so bad that you can't add another 0.5" to your board?
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Professionals use 0201 (inches) for maximum flexibility and minimal sizes. So even 0402 is larger than professional projects. If we're all accepting "larger hobbyist sizes" anyway, might as well go all the way up to the much easier 0603 or 0805 parts.
While a 0402 is slightly larger than a grain of sand, I'd say 0805 is approximately the size of a grain of rice. So yeah, doable with tweezers and solder paste. Just imagine lining up dry rice and its well within the capabilities of most hobbyists.
Its just problematic when you get smaller than that.