Working alarms are the cheapest life-safety upgrade in any home. The code sets minimums for where they go, and modern homes require them to be interconnected so one alarm triggers them all.
Smoke alarms
Smoke alarms are generally required in each bedroom, in the hallway or area serving the bedrooms, and on every storey including the basement. In newer construction they must be interconnected and hard-wired with battery backup, so a fire detected anywhere wakes the whole house.
Carbon monoxide alarms
CO alarms are required where there's a fuel-burning appliance (gas furnace, water heater, fireplace) or an attached garage, placed near sleeping areas so they wake occupants. Unlike smoke alarms, CO alarms don't have to be hardwired — battery or plug-in models are fine, and combination smoke/CO units are common. CO is odourless, so the alarm is the only warning.
Maintenance
Test alarms monthly, replace batteries yearly, and replace the units themselves on the manufacturer's schedule — smoke alarms about every 10 years and CO alarms about every 7 to 10. Expired sensors stop protecting you even if the test button still beeps.