Question regarding a specific type of backup for data

You are absolutely on the right track thinking about backups, especially for games and schoolwork. Let me break it down a bit:

File History,  Good for Simplicity

File History is actually a decent free option if you are mainly concerned about personal files like documents, photos, and school work. It won’t back up your installed programs or Windows settings, though  just the files in your libraries (Documents, Desktop, etc.).

Alternative: Full System Image

If you're open to doing a full snapshot (aka system image), that backs up everything — apps, settings, and files. But yes, it uses a lot more space and isn’t incremental like File History. You can create one using the “Backup and Restore (Windows 7)” tool built into Windows — it’s still available in Windows 10/11.

External Drive Size Estimate

Since your internal drives total 3TB (1TB + 2TB), here’s what to consider:

For File History, 2TB could be enough, depending on how many personal files change frequently and how many versions you want.
For full system images, ideally you’d want a 4TB external SSD (especially if you want to back up both NVMe drives with some room to spare).
Do You Need Two External Drives?

Not necessarily. You can:

Use one 4TB external SSD and create folders for each internal drive's backup, or
Use a tool like Macrium Reflect (free) for full disk cloning or imaging, it gives you more control and compression options.