What privacy related configurations should I be mindful about when deploying in a VPS?

I have a small VPS running a few scripts and some personal projects without any private information (just the keys for the services needed).I want to expand it to selfhost more stuff like Google photos alternative, knowledge DB, git, etc., but I'm not sure how is my data protected inside a VPS.There was a post mentioning everything is visible to the provider via the hypervisor, so I was wondering if an encrypted volume would make no difference for protecting any data uploaded there.

Am I being too paranoid? Or should I be investing in a small physical server?