While using your wireless network without any encryption settings will work just fine, it's a bad idea for several reasons.

Setting up a wireless network without an encryption key allows anyone within range of your wireless network to connect to your wireless network. This has a couple of severe consequences. First, connecting to your wireless network allows an outsider to use the Internet through your Internet connection. You paid for the service, so you would not want anyone being able to take advantage of the service you've paid for yourself. Secondly, when anyone connects to your wireless network, they can access any Network File Shares that you've setup on your own computers. Most Network File Shares are configured to allow access to anyone on your network, so your files are exposed in this situation.

For these reasons, it is imperative to always enable encryption in a wireless network and configure an encryption key that is not easy to guess. Using your pet's name, your street number, or your phone number as the encryption key will allow anyone with even limited knowledge about you to guess your key and gain access to your network. Practice good security by using a hard-to-guess encryption key and make sure you don't become a victim.