how do i know if i still need this extra space and charge?

Go to Settings>Your Name>iCloud>Storage. You can see the total storage you are using at the top. You can also tap on Manage Storage to see which apps are taking up your iCloud storage. Tapping on Backups allows you to see the size of your backups.

The backup that is titled iPhone is your old phone backup. The one titled iPhone 2, this phone, is the new backup. Do not delete the new backup.

If you have already set up the new phone and all of your data, settings, photos, files, etc. have transferred over, there is no need to keep the backup from the first phone.

When I bought my iPhone XR, I held onto the backup from my 5s for about a few days. There was really no need fo save the old backup once the new phone was set up and I had a backup for the new phone. It was a just in case thing for me.