Mac storage basics · Time Machine basics
What is the 3-2-1 backup rule?
Short answer: Keep 3 copies of important files, on 2 different kinds of storage, with 1 copy kept off-site — for example the Mac, a Time Machine drive and a cloud or off-site copy.
It's a simple rule of thumb for not losing files: keep 3 copies of anything important, on 2 different kinds of storage, with 1 copy somewhere else (another building, or a cloud service).
For a Mac that might be: your files on the Mac, a Time Machine backup on an external drive, and a third copy in a cloud backup or on a drive you keep elsewhere. Moving files to an external drive to free space is not a backup on its own — the drive then holds the only copy, so back it up too.