An anecdote is the little story which you tell your friends usually as part of a natural conversation. Usually they're quite funny, they're meant to be amusing and contain a story. Exaggerated means that details in anecdotes are made bigger than they actually are. Often an anecdote will involve some kind of comments at the end. For example, what you've learned from the experience or what you think of the situation now. Or maybe what that helped you to learn about that time of your life or something.