Imagine if you will, you are huddled over your computer early one morning, plowing through your overstuffed inbox. In a distracted state, you reach for your hot, steaming mug of coffee. Without looking, you bring it to your lips. Then, suddenly, for just a split second, your fingers loose their grip. As if in slow motion, the mug jerks sideways and a wave of muddy brown liquid sloshes all over your computer. After a moment of frantically trying to sop up the mess you realize, there’s no hope. You hear a strained clicking sound from the guts of the machine and watch helplessly as a once bright light fades to black.

Are your palms sweaty at the mere thought?

Assuming the physical computer is covered by insurance, the real issue this hypothetical situation reveals is the critical importance of backing up your data. While the chances of having a catastrophic event like the one described above may be low, the chances of data loss due to computer or hard drive failures are quite high. In fact, the average life expectancy of a hard drive is only 3-5 years.

If you do not yet have a back-up system in place, it is only a matter of time until you lose all of your data; your photos, your movies, your important documents, and your music.

Happily, back-up technology has come a long way in the past few years. It has never been easier to secure your precious memories and documents. There are essentially two different approaches to backing your data: storing the information “in the cloud” and on an external drive. We take a look at the pros and cons of each approach and outline some services and products in each area that make the whole process pretty darn effortless.

Saving Your Information in “The Cloud”

As this approach implies, rather than backing up your files on your computer or on a hard drive that you own, you store them virtually via a paid, online service. Because it is their job to ensure the long-term security of your data, which they do with things like redundant data centers, storing your data in the cloud is one of the more expensive options. That said, compared with the cost of trying to recover lost data, it’s a pretty cheap insurance policy. Here are three excellent, fairly-priced data-storage services.

Dropbox. This simple online file storage service with a very intuitive interface enables busy people to backup without thinking much about it. It works whether you use a PC, a Mac, or a Linux machine. There are also versions for mobile devices as well, from Blackberrys and iPhones to Androids. The service is free for the first 2 GB. Then there are paid plans for 50GB ($9.99/mo) and 100GB ($19.99/mo). Just download the app, make the dropbox your main “virtual filing cabinet” (using any filing names and conventions you want) and you never have to think about backing up again. The program will automatically update and sync files between the cloud and your computer whenever it’s online. So those vacation pictures you just uploaded to your computer, yes, they’re backed up too. Side bonus: you can access files from any computer (or smart phone), anywhere. So you’re never without a file when you need it.

Windows SkyDrive. If you are one of the millions currently using Hotmail, Windows Messenger, or Xbox Live, you already have access to use Windows SkyDrive. This online file hosting service allows users 25GB of free space to upload their files to a cloud storage that can be accessed from any computer. You may keep the files private, share them with contacts, or make them public. One great feature unique to SkyDrive is group integration, which allows users to create groups and use up to 5GB to share, modify, and delete files (ideal for that photo book you and your siblings want to put together for your parents). You can also subscribe to RSS feeds of the content of public folders, which contain image previews and download links if you need an easy way to keep up to date with friends or acquaintances.

Box.net. Similar to the other two options listed here, the box.net file hosting service enables users to manage their documents, media, and online content virtually. But unlike the other two options, this service is specifically geared to business users. It boasts features like online workspaces that enable multiple users to view and edit a file, comment, and even assign and manage tasks within one folder. It integrates with business programs like Salesforce.com and Google Apps. And its integrated content viewer and the ability to embed these files anywhere on the web make it ideal for creative professionals. You can get a personal account for free (5GB of storage), but the premium service levels offered are: Businesses ($15/user/month) and Enterprise (custom pricing).

Saving Your Information “Automatically” On External Devices

Both PCs and Macs have sophisticated backup software that is built right in to your computer’s operating systems. Unlike the services that store your data in the cloud, these programs have the ability to backup your entire system image, which is an exact copy of your drive (including system settings and programs, not just your files). If you ever need to restore a computer that’s crashed, this makes the process much, much easier. We strongly recommend this approach for anyone who lacks confidence in their program installation skills.

In an ideal world, you should use these programs in combination with an external hard drive. You could certainly partition a portion of your computer’s hard drive to use as your back-up, but, if your hard drive fails, your backup partition is likely to as well.

PC Users – Backup and Restore. If you have Windows, you already have Backup and Restore. Windows Backup and Restore allows you to make copies of data files for everyone who uses the computer. It’s very customizable, as you can let windows choose what to back up, or you can select the individual folders, libraries, and drives you want. By default, your backups are created on a regular schedule, but you can always change the schedule or create a backup manually at any time. The program automatically keeps track of which files are new or modified, and adds them to your backup.

Mac Users- Time Machine. Time Machine is basically the Mac users’ equivalent to Backup and Restore. It allows you to automatically back up your entire system, and keeps an updated copy of everything on your Mac, including application programs, files, photos, music, movies, emails, calendars, and contacts. It allows you to restore items, or even entire systems with ease, and all you need is a backup drive.

Here are three external devices that are worth considering if you are going to go this automatic back-up route.

Western Digital Elements External Hard Drive. Western Digital offers External Hard Drives in 6 different sizes ranging from 500GB ($59) to 3TB ($119) in space. They are eco-friendly, and already formatted to work with Windows, for easy plug-and-play access to your extra storage (they can also be reformatted for Mac). Find them on Amazon.com

Toshiba Canvio Basics Portable Hard Drive. This sleek hard drive comes in four different sizes, ranging from 320BG ($54) to 1 TB ($89) on Amazon.com. Its attractive, compact design will look good on any desk and makes your files truly portable.

SanDisk Cruzer. Flash drives are an excellent way to store extra files. They plug right into your USB drive, and are compatible with all computers, and even some photo frames, cars, and TV’s. They’re compact enough to fit in your purse, being only a few inches long, and you can purchase 16GB of extra storage for only $19.61. This nifty version, which has a retractable USB, is available at Amazon.com.