The problem password managers solve is arithmetic. A person can memorise perhaps five strong passwords; a typical adult has well over a hundred accounts. The gap is filled by reuse, and reuse is what turns one leaked site into a dozen compromised accounts.
A manager stores every password in an encrypted vault that only your master password can open. The vault provider cannot read it, which is also why losing the master password is serious — there is no reset in the usual sense.
The everyday benefit is more practical than security theory. Because the manager matches passwords to the exact web address, it simply will not fill your bank password into a lookalike scam site. That single behaviour blocks most phishing.
Passkeys are the next step: instead of a secret you type, the device proves who you are. Most managers now store these alongside ordinary passwords, so adopting one now makes that transition easy later.