What money does
Money solves a major problem: without it, people would have to trade items directly, like exchanging a chicken for a pair of shoes. Money makes trade easier because everyone agrees it has value. It serves three main purposes. First, it is a medium of exchange, meaning people accept it as payment. Second, it stores value so you can save money and use it later. Third, it is a unit of account, meaning prices are measured in money.
Types of money throughout history
Early societies used commodity money, which had value because it was useful or rare, such as gold, salt, or shells. Later, people created representative money, like paper notes that promised you could trade them for gold or silver. Today, most countries use fiat money, which has value because the government says it does and people trust and accept it, not because it is backed by gold or another physical item.
Modern money forms
Most money today exists digitally in bank accounts and is moved through electronic systems. Physical currency still exists as coins and paper bills, but it represents only a small portion of total money in the world. Credit cards, debit cards, and online payment systems also function as money because they allow people to exchange value and make purchases.
Who controls money
Central banks, like the Federal Reserve in the United States, control the supply of money and set interest rates. Governments create laws about what counts as legal money in their country. Banks and financial institutions manage most money transactions and store money for individuals and businesses.
Why money has value
Money has value because people agree it does and trust they can use it to buy things. This trust is built on the stability of the government and the banking system. Money only works if everyone believes in its value and is willing to accept it as payment. 
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