Updating Themes & Child Themes

Hi, I noticed a few days ago this: You have version 1.0 installed. Update to 1.1.1. Please Note: Any customizations you have made to theme files will be lost. Please consider using child themes for modifications. What? So all my custom work will be wiped out if I simply update? So, does this mean I HAVE to make a child theme? I didn't know about this aspect and don't dare do anything yet for fear of losing all my custom work. Any advice and/or suggestions would be much appreciated. Thank you! -Doren