I've got a 2TB HDD in my computer, with only about 170GB of data on it. If your computer does go down, needs to be formatted, or if the hard drive dies, an external hard drive can be an absolute life-saver!
Could anyone recommend a good quality USB 3.0 external HDD which isn't going to break the bank?
Are you looking for a 3.5" enclosure or a 2.5"? If your backup is going to be very big, then definitely go with a 3.5" as geofelt mentioned. Not only you will get the same features as an external hard drive, you can swap the drive any time you'd like.