Of course, you could manually copy all your files, photos, and videos to an external drive, or burn them to a CD or DVD. But, odds are, you'll fall out of the habit or miss something important—and won't know until it's too late.
Fortunately, there's excellent software that does the job for you. If you own a Mac using Operating System 10.5 or later, you've already got Apple Time Machine, which will continually back up your software and data to an external drive. Most Windows machines also come with a basic, bare-bones backup utility. But if you want more personal control over what files you back up and when it happens, you'll want a backup program like Acronis True Image Home 2009 ($50) or Centered Systems' Second Copy (starts at $30).
The beauty of backup software is that you can generally set it and forget it. The basic drill involves picking what types of files you want to back up, where you want to store them (such as, to an external hard drive, USB thumb drive, or disc) and when you want it to happen. Software also makes it easy to restore files when you need them later.
Upside: You don't need to think about backing up again until your storage device runs out of room or you need to restore files. It's also the least expensive of the three options.
Downside: You may need to buy an external hard drive for storing backups, which can cost another $75 to $150. You'll need to actively manage multiple backup sets; that means labeling and storing them carefully, and erasing older backup sets off external drives. You'll also want to keep copies in another location, like at work or in a safe-deposit box, and rotate them on a regular basis. Otherwise you could lose everything in a fire, flood, robbery, or other catastrophe.
Best for: Telecommuters, home-based businesses, and anyone who can't survive without immediate access to complete backups.