If you adopt just one security tool this year, make it KeePass. This free and open-source password manager is available for Windows, with unofficial ports for iOS, Android, Linux, and Mac OS X. A secure, lengthy, completely random password goes a long way towards improving your security--and having a separate password for each and every website and service you use is the single most important thing you can do to keep secure. See all Software reviews.
For too many of us, the alternative to a password manager is using the same password everywhere. This means that if the user database of any one website you sign up for is compromised, hackers can (and often do) just try your username and password on many other websites and gain access. See all software downloads.
So, seriously: Use a unique, difficult password for each and every website you sign up for, no matter how little you plan to visit it. KeePass lets you keep all of these username/password pairs in a securely encrypted database, protected behind a single master password, which is the only password you're ever going to have to remember.
And unlike commercial competitor LastPass, KeePass doesn't automatically put your password database in the cloud (although you can put it into Dropbox yourself).
KeePass features its own random password generator, so you don't have to come up with random passwords on your own. It includes a quick-search box where you can type just a fragment of a website's name to quickly find it on your list. The list itself is built to contain thousands of records, and you can subdivide it into folders and subfolders to keep things organized. KeePass isn't limited to just usernames and passwords, either: Each entry has several other fields, including a free-form Notes field which you can use for securely storing any sort of text.
One way the baddies circumvent password protection is with a keylogger: an application (or a physical hardware dongle connected to your computer) that sits in the background, quietly logging every single keystroke you type, to later transmit this information to an attacker. With a keylogger installed on your system, an attacker could potentially learn every single word you type throughout the day, including all of your usernames and passwords.
This is another thing KeePass protects against: Thanks to its AutoType feature, you never have to manually type individual website passwords. KeePass pastes them into the browser window using a combination of virtual keystrokes and clipboard obfuscation, making it all the more difficult for a keylogger to figure out what the password is. AutoType is sometimes finicky, but when it works, it's very useful. KeePass also lets you enter your master database password in a prompt protected by UAC, which protects it from any software keylogger that isn't running with Administrator rights on your machine.
Get KeePass, and start using it right now. You'll thank yourself next time a major website breach vents thousands of usernames and passwords into cyberspace.