create ISO backup of machine

Hello. I created a backup of my machine using DD. Only problem is that it used the entire hard drive? how do I compress this? or at least only backup what is actually being used. Im trying to just create an image for myself to use instead of constantly re-downloading linux and re installing it.

heres the command ive been using: dd if /dev/sda of=/home/username/ubuntu.iso bs=4M conv=noerror

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Edit: I guess i wasn't clear. So basically every time I reinstall linux I always have certain things I install/uninstall right off the bat. It would be easier to just have an image of this so I wouldn't have to spend an hour doing this every time i wipe my machine.