To add to what Hamluis has said, the mininum you need to back up is your own work.
By this I mean anything you have created or saved on the computer - things like all your docs and spreadsheets; photos, music; hobby files; contact lists; links, log-ins and registrations for downloaded software; and so on.
If a hard drive fails or is terminally affected by malware they are not terribly expensive to replace. Re-installing your OS and applications is normally considered tedious in the extreme but is not usually expensive. Replacing the photos of your grandchildren that were on the hard drive may be impossible - or very expensive.
How much space you require for this depends entirely on how much data you have.
At the other end of the scale, you can make an image of your compete hard drive. This will require that you need storage at least equal to the capacity of your hard drive - some would say double so that you don't need to delete the last image before you do the next one and I would agree with this point of view. Going the image route means that in the event of a serious problem you can reload the compete hard drive from your backup and have it back running quite quickly.
One final point for you to consider. It is a good idea to have two backups ! You keep one reasonably to hand for quick access, and you keep the other somewhere else against the risks of your house burning down. Don't laugh. A transport company I used to work for had a fire which destroyed their offices and main warehouse. They suffered about 12 hours reduction of control of their fleet of trucks due to effective off-site backups.