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If you're maxing out your current drive and slowing down, replacing the SSD is usually the move - it's a one-time fix that actually improves your whole system, not just where you store stuff. External storage is great for backups and archiving, but it won't help if your OS and apps are choking on a nearly-full internal drive. That said, if you've got plenty of space left and just need somewhere to dump files you don't access often, external works fine and costs way less.
Don't assume external storage is always a slower or worse option - it really depends on what you're actually doing. If you're just archiving old files or backing things up, external drives work fine. But if you're regularly working with large files (video editing, photo libraries, game installs), constantly plugging and unplugging becomes annoying fast, and you'll notice the speed difference between USB and internal storage.
The real question is whether your laptop's storage is the bottleneck right now. If you're constantly running out of space and deleting stuff, replacing the SSD makes sense - you get faster boot times, snappier performance overall, and you don't have to manage cables. If you've still got room on your drive but just need a place to keep archive stuff, external storage is cheaper and easier. Many people do both: keep an internal SSD at a reasonable size for active work and use external for backup or long-term storage.
One thing to check first - can you even replace your SSD? Some newer laptops have soldered storage that can't be upgraded. If yours is replaceable, most SSDs aren't expensive anymore, so it might be worth it if you use your laptop heavily. If it can't be replaced or you'd rather not deal with opening it up, go external, but pick a decent brand with good reviews rather than the cheapest option.
The real deciding factor is whether you need your files fast during actual work or just need them to exist somewhere safe. If you're running applications, editing video, or doing anything that needs constant access to large files, an internal SSD upgrade pays for itself in time saved - external drives introduce noticeable lag even on USB 3 or Thunderbolt. But if your laptop's storage is genuinely full because you're hoarding archives and backups, external is the cheaper route and perfectly adequate for that job.
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