Key directories
In Unix/Linux there are 2 directories that are critical to the system in terms of what makes one system unique when compared to another system. These directories are /etc and /var. The /etc directory contains all the configuration files for the various services that run on a given system.
The /var directory contains various databases about the system such as what packages are installed on it as well as logs about what's been happening on the system.
The 3rd directory that's important, not so much to the system but to the user, is the /home directory. This directory houses data that's of value to the users. Things like documents, mp3s, videos, etc. are kept here, typically.
Partitioning
The /home directory is often times segregated to its own partition, more because of history than for any really practical reason at this point. It's completely fine to go with this model even today, but it really doesn't by you anything, especially when the / and /home are sharing the same physical HDD.
It gives you a little protection in the sense that if the /home directory fills up, the system's primary directory / should in theory still have free disk space, after /home has been filled, but really this is no big deal, IMO.
Best approach?
This is a completely subjective question, in Unix/Linux you have to do what makes sense for your particular situation, hence this is why there are so many choices for things like partitioning, default shell, etc.
So what should you do?
I would make a concerted effort to make sure that you keep all files related to "user" data in some organized fashion under your /home directory and also to take steps to back it up. Either to another system on your network, or to some attached storage to the system.
It's pretty trivial to backup your /home directory using a tool such as rsync, and this can be scripted so that it runs in an automated fashion from a cron, for example.