Experience is the way a character grows and changes over time.
Experience has been completely changed in Third Edition, making it easier to learn to skills in parallel. It will still take a long time to raise higher skills, but your character’s development in other areas isn’t frozen while you’re waiting.
Experience Points (XP) are gained periodically to reflect what your character has been learning and/or practicing during that time. You spend them to improve your abilities. The number of XP needed to reach the next rating depends on the current rating, so higher skills take longer to learn.
Tip: XP should always be spent in a way that makes sense ICly, and should be supported by RP. Your character shouldn’t just wake up one day and be a basketweaving expert, or learn Swahilli with no books or people to teach it to him.
XP represents incremental learning or practice. You spend XP as you get it, resulting in a slow progression toward the next rating. You’re allowed to store up a few XP just in case you forget to spend them, but you don’t save up a bunch to spend all at once.
Right after chargen, and after spending XP to learn an ability, you have to wait some time before you can spend XP on that ability again. You can still spend XP on other abilities while you’re waiting. Games may also limit the absolute maximum number of ability rating points you can have, even with experience.
XP awards, limits and costs vary from game to game. For an example, see FS3 Core.