Because shared hosting has more disc space limitations than does dedicated hosting, keeping as little information as possible on the server is paramount. There is generally little room for storing data that isn’t actually used as part of the site. This means that every site file must be backed up locally and that one must be thorough in that endeavor.
You should have a “mirror” of the entire site on a local hard drive and any changes made to the live site should be made to these mirrored files. This means a directory where the files, structure and names are identical to those housed on the server. Should anything happen to either the server’s version or the local version, the surviving files can be transferred and restored to replace those which were lost.
Your working directories, where several versions of the site, extra pages, graphics and other media which aren’t currently used on the live site are held, should not be stored on the web server. These are oftentimes large and the web server potentially provides access to unauthorized users. Working files should be stored separately from the live version of the site and should only be transferred when they’re actually approved for usage on the site.
Remember that the only files that should ever be hosted on a server are those you wish the world to see. If your site creates text files when users fill out forms, download and delete these from the server to save space.