Ppl use all kinds of variables.
If you meant you wanted variables inside the loop() function to retain their values across the many calls to it that normally happen, you can add static to the declaration of those variables inside the function and they will persist, retain its existence and value even though the function is left and called again.
These would only be available inside the function.
Otherwise, if you use the same variables all over your code, those need to be global.
In a small sketch, global variables are not so bad. As pointed out, as sketches get larger, it becomes a nightmare to keep track of all those variables, so it becomes worthwhile to start exploiting function arguments and local static variables.
a7