To get access to your data, a hacker has to plant its device between your device and the destination server. This way, your data can be intercepted by the hacker, who will have the ability to decrypt and read it. Under these circumstances, it is easy for hackers to get your email user name and password, your credit card information, and any other data that they may be interested in.
Once that they have gotten access to your device, the bad guys can also infect it by uploading various species of malware to it. So yes, it's not wise to install that file sharing application, even if all your buddies are using it to exchange useful apps. However, if you disable sharing while you are connected to a public network, nobody will be able to access your files.
So, how serious are these Wi-Fi security risks? Well, you can easily fix most (if not all) of these problems by installing and using a virtual private network application. You may have heard about VPNs before; their main goal is to create an encrypted data communication tunnel between you and the destination website. This means that even if a hacker manages to insert himself as a man in the middle (that's the technical name for this type of attack) he may be able to get access to your data, but he won't be able to decrypt it.
All the banks and (more recently) all reputable sites have been using HTTPS/SSL connections for several years now. It's a strong data encryption protocol, which will help keep your data secure. By only accessing HTTPS websites, you will make it very hard for hackers to get access to your data.
Next time when you log into one of your accounts, no matter if we are talking about Facebook or your bank account, check out the tiny padlock icon which shows up at the top of your browser, on the left side of the URL bar. If it's a closed lock, that website is using a secure data transfer protocol, so you should be safe while you are visiting it.
Finally, don't forget to turn off Wi-Fi when you aren't using your device for online-related activities. And if that sounds too complicated for you, there are lots of apps that can disable Wi-Fi automatically. Why keep wireless on while you are sleeping, for example? By turning it off, you will also save quite a bit of battery power.
Someday you may need to connect to a public hotspot, after all. It can be dangerous, but if you apply these tips I guarantee that you will significantly decrease the risks.