A figure of speech is a word picture. It can be a comparison between two objects, people or events to highlight shared qualities between the two. Figures of speech can be exaggerations or ironies.
Sometimes words are used in context to mean the opposite of their literal meaning. Literal language is straightforward speech where words are interpreted according to their normal, dictionary definition.
Similes and metaphors are two kinds of comparative figures of speech. Similes are "like" or "as" comparisons between two subjects. "She is as lovely as a rose" or "He sleeps like a bear" are similes.
Metaphors directly compare two subjects. "This is a madhouse" or "That's the bomb" are common metaphors for things that are crazy or cool. Hyperbole, ironies and personification are other ways to speak figuratively.
Employing figurative language can make your message more interesting and provocative. It can create a variety of emotional responses in the listener depending on the context. Literal language is more likely to sound authoritative and expert. Legal contracts and rules should be written in literal language.
According to the Myers-Briggs Personality Inventory research, personality can influence a person's use or comprehension of figurative and literal expressions. Intuitive personalities use more figurative, poetic forms of expression. Sensors prefer a more direct, literal approach and use more literal communication. Perceptive people who like variety prefer figurative language. Judges shoot straight with literal speech and writing.
If you tend to use figures of speech, practice ways of saying things literally to not confuse others. Those that always speak literally can practice ways to liven up their expression with figurative language to increase their level of persuasiveness and hold the interest of their audience.