diff --git a/crates/util/src/paths.rs b/crates/util/src/paths.rs
index 63c3c6d884..b04c12a204 100644
--- a/crates/util/src/paths.rs
+++ b/crates/util/src/paths.rs
@@ -1,4 +1,4 @@
-use std::path::PathBuf;
+use std::path::{Path, PathBuf};
 
 lazy_static::lazy_static! {
     pub static ref HOME: PathBuf = dirs::home_dir().expect("failed to determine home directory");
@@ -23,3 +23,55 @@ pub mod legacy {
         pub static ref KEYMAP: PathBuf = CONFIG_DIR.join("keymap.json");
     }
 }
+
+/// Compacts a given file path by replacing the user's home directory
+/// prefix with a tilde (`~`).
+///
+/// # Arguments
+///
+/// * `path` - A reference to a `Path` representing the file path to compact.
+///
+/// # Examples
+///
+/// ```
+/// use std::path::{Path, PathBuf};
+/// use util::paths::compact;
+/// let path: PathBuf = [
+///     util::paths::HOME.to_string_lossy().to_string(),
+///     "some_file.txt".to_string(),
+///  ]
+///  .iter()
+///  .collect();
+/// if cfg!(target_os = "linux") || cfg!(target_os = "macos") {
+///     assert_eq!(compact(&path).to_str(), Some("~/some_file.txt"));
+/// } else {
+///     assert_eq!(compact(&path).to_str(), path.to_str());
+/// }
+/// ```
+///
+/// # Returns
+///
+/// * A `PathBuf` containing the compacted file path. If the input path
+///   does not have the user's home directory prefix, or if we are not on
+///   Linux or macOS, the original path is returned unchanged.
+///
+/// # Errors
+///
+/// This function will not produce any errors, but in case the input path
+/// cannot be stripped of the home directory prefix, the original path
+/// will be returned unchanged.
+pub fn compact(path: &Path) -> PathBuf {
+    if cfg!(target_os = "linux") || cfg!(target_os = "macos") {
+        match path.strip_prefix(HOME.as_path()) {
+            Ok(relative_path) => {
+                let mut shortened_path = PathBuf::new();
+                shortened_path.push("~");
+                shortened_path.push(relative_path);
+                shortened_path
+            }
+            Err(_) => path.to_path_buf(),
+        }
+    } else {
+        path.to_path_buf()
+    }
+}