Ah, I see. In that case don't worry about the live USB for now and install Timeshift just like you would with any other program. You can restore from a snapshot from the same machine, another machine or, if needed, from a live USB in which case you'd have to install it when needed.
You can configure it to take snapshots periodically, for example just before running a software update or installing a particular program. I don't want to give you any specific advice on this one as I've never used Timeshift myself.
So, to summarize:
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"Backups" is a tool that will create a copy of your personal files. Make sure to store these copies outside of the machine so that you can recover them later should something happen to your computer.
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"Timeshift" makes a snapshot of your system files and settings, instead. Use this to "retrace your steps" in case something goes wrong after a software update, faulty install, etc.
I recommend you check out this and other threads across the forum to see how other people implement their own backup strategies: