You're wise to get an external hard drive.
Macs are great (I own an iMac) and reliable and all that jazz, but they're no different than any PC else when it comes to hard drives. They're all susceptible to crash at the same rate. Happened to me last fall ... I had Mac arrogance and hadn't bothered to back the computer up. The drive crashed, and I lost EVERYTHING. Hard lesson. Now I use Time Machine to automatically back up the entire system on a routine basis, and I use a second hard drive to use specifically for audio files.
Almost any hard drive will do. Nowadays, you can get a 1 TB drive for about $100. Since you're on a MacBook, you may not want to use Time Machine, since it's more of a timed backup system that you need to be tethered to. But definitely back up your audio projects one way or another, and be diligent about it.
The previous poster was correct ... you don't want to work off your external. Use the computer's internal hard drive for that, then back up to your external.
Good luck!