Excellent advice from whs. You really need two more drives, one internal for the machine and an external.
Partitioning is a very poor strategy, full backups all the time is very inefficient. Part of the problem here is the way in which Microsoft and some applications store your data, almost all of them mix it up on drive C unless specifically told not to, this is really really bad. Part of your backup strategy should include how you manage your data in the first place, i.e. where is it? the best place for it is off the system drive on a separate physical hard drive.
By far the best advice here is the recommendation for an external hard drive, backing up files to the same physical drive is only backing them up to protect from you or an application messing up the originals anyway, if your hard drive goes or your machine catches fire etc etc the data is gone, there is no recovery. At the very least you need to backup to an external USB drive, CD or DVD that you can store physically away from the machine. What happens if the criminal types steal your s**t, where is your backup then?
How you back up data will depend on the source, system drives are perfect targets for imaging, programs such as Acronis TrueImage, Macrium Reflect, Symantec Ghost are very powerful tools and well worth their price, all three can be had for less than $40 each. You get one OS or hard drive failure and the hours saved by restoring an image are well worth what you paid. If my system dies it rarely takes more than 15 minutes before I am running again, no more installing the OS, followed by all the drivers, followed by all the patches, followed by all the applications, followed by all the patches, followed by the task of reconfiguring your desktop to how you like it, tracking down all the favourites now blown out of the internet browser, followed by the realisation if you use MS Outlook or Express that all your E-Mail is gone too, then you explain to the wife that you lost all the family photos and the videos ....
Once you know where the data is such as documents, pictures, Video etc you can do these easily with Microsoft backup to a variety of media, of course if all your stuff is on one drive then the imaging tool is all you need.
BUT - do yourself a favour - TEST IT, Make sure it works, start from scratch, install the OS, install the imaging tool, image the drive and see if you can restore it before you go too far. If the only time you find out it doesn't work is when you are in the s**t then it is pointless. Repeat this process until you are confident that the restore is going to work.
You say that you can't afford backup software but you can't afford not to, you spend $100's on a PC and software and then baulk at $40 for protecting your s**t, bit of a no brainer really.