As with most Windows instructions there are several ways at many stages so you will receive all sorts of different (but good) advice.
Backing up gives you useable copies of any files you would hate to lose, e.g. pictures tunes letters etc (data).
It is possible, more difficult, but probably more important to keep a recent and restorable copy of your Windows installation.
The methods vary (others again will offer a variety of ways) and equally important is to store these backups in a safe place.
This is where your disks (American spelling) come in. CD or DVD blanks depending on how much space you need.
An external HD is my preference but is only an alternative.