Diacritics in a linux console for pico/nano/etc

I wanted to quickly edit a text file with pico and when I pasted a word, I noticed that all diacritics were replaced with some funny characters. A quick fix was to edit /etc/locale.gen and add my language like pl_PL.UTF-8 UTF-8 for Polish. Then run # locale-gen as root and all was working good. A list with all supported languages can be found in /usr/share/i18n/SUPPORTED