One of the horrors wrought on good writing comes from one of the most unlikely, or possibly the most predictable, places — schools. Academic writing drills into us that we must use formal language and that means no contractions. Somehow, this can get dragged into our fiction.
We aren’t writing term papers about the effects of stimulants on the basal ganglia. These aren’t final theses on Shakespeare’s use of conjunctions. Those things would make anyone’s eyes bleed and brain cells shrivel from boredom. How my professors stayed sane is beyond me. On second thought, I’m pretty sure a few of them didn’t.
Unless your character is Data or Queen Elizabeth II, they will probably use contractions. These are stories of murderers, victims, elves, bakers, etc. All of the dialogue cannot be formal. Even if your main character is a stiff who only uses formal language, it’s unlikely everyone he comes into contact with will. Or, maybe they do, but only while he’s around? That would add a layer to the story and be an actual reason for not using contractions.
Here are a few examples of how contractions can change the meaning of a sentence:
I didn’t go to the store.
That’s a fairly straightforward statement of fact. By itself, it doesn’t imply anything; no defensiveness or forcefulness.
If the same character were to say:
I did not go to the store.
That adds emphasis. Our character is emphatic that he was not at the store. I think he’s probably lying, but that’s just me.
Either way, your ability to add that emphasis is lost if your characters don’t use less formal language most of the time. We all use contractions, your characters should too.