Need to replace internal HDD - will external suffice (more space/$)

When it comes to data, I discard nothing. Recently, my 1TB HDD in my 8-year-old Dell crashed. I'm working on recovery options (fortunately, I have online backup for a lot of it), but I'm wondering if I can save some $$ and agony by just plugging in an external 2-or-more TB drive to use for storage. (My OS and programs are on a still-intact SSD C drive.) I just recently retired and do most things online now, including Google Docs, Sheets, etc., but I do store scanned photos and historical docs on my computer (which I'm hoping I backed up!). So while I am somewhat impatient with access speed, read/write may not be such a pain point going forward (with the possible exception of my SGV graphics).

Has anyone done this and been satisfied? If so, would external HDD or SSD be better as my primary storage on my computer? I have typically had a mix of archival and active data on the same HDD on my computer. Maybe better to separate archive from active projects (as if one does not rapidly become the other), and use different media for one vs the other? Any downsides I'm not considering?

EDIT: If your drive crashes, and then partially recovers, be aware that you can’t just download a previous backup from Carbonite. There was just enough time, apparently, for Carbonite to backup the revised version of the drive, which does not include my lost files. I’m told the files are there, but that this needs to be escalated to access them. Support call is scheduled for tomorrow morning. I’m vacillating between cautious optimism and full freak-out panic that I’ve lost everything, including work files. 😱