UTF-8 is a variable-width encoding for Unicode. ASCII characters (A–Z, digits) take 1 byte each, common European characters take 2 bytes, most Asian characters take 3, and rare characters (emoji, ancient scripts) take 4.
Because ASCII is a subset, any file that's valid ASCII is valid UTF-8, making migration painless.
Always save source files and database columns as UTF-8 unless you have a specific reason not to. 98% of websites use it.