Why make backups
Disk crashes
Disk crashes happen very often. The hard disks and fans are the most fragile components of a computer, because they are mechanical devices with moving parts inside: rotating disks and moving heads, which are inevitabely fragile. The processor, RAM, main board -- they all are static microchips; the hard disks are not.
The hard disks crash in most unexpected moments. The result of such a hard disk crash is that you cannot access your data anymore. You cannot read your files. You cannot run your programs. Sometimes you cannot start the computer anymore.
In such case, you want to have a backup with all your important data.
There are several ways of making a backup. Generally, it means that you should copy the (important) files to other, safe location. You also may want to compress the files, so they get smaller and take up less space.
Theft
It happens very often that the information stored within a computer is much more valuable than the computer itself. Imagine that somebody has stolen a computer worth about $500, while the information inside was an effect of two years of work of 20 people. Try to think of what you have inside your computer and what happens if you lose content of your hard drive.
See also