Lists are a really useful feature on Mastodon, especially if your Home timeline is way too busy for you to keep up with. Lists are also useful for following accounts that may post too often, such as news services or sports results.
Here's a complete guide to Mastodon Lists:
➡️ https://fedi.tips/how-to-use-the-lists-feature-on-mastodon
I've updated the guide to take account of Mastodon's new Lists interface, which makes it a bit easier to create and edit Lists.
Hopefully the guide is also a bit clearer.