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How is one suposed to backup 1TB on the cheap?

Buy more HDs to use as an offline backup or buy a tape drive. Backup systems aren't cheap. It all depends on how valuable your data is. If you feel okay with RAID5 just protecting against drive failure then go with that. If you want to make sure that if you accidently formatted the wrong partition that you can get everything back then go with a backup system as well.