So that one better understands what memory is we must learn the Information Processing Model or what we like to call The Map of Memory's Travels! Everything doesn't just start out as a memory, but instead things we hear, see, taste, smell, do or participate in. These things are better known as stimuli (you don't have to focus on these harder words, just the main ideas covered).
Here's a picture that breaks it all down!
You are always taking in information from the world around you, even if you don't realize! First this information you take in goes to your sensory memory and if it lasts it moves or is transferred to your short-term memory where it might stay for a bit, but could still be forgotten. If not forgotten then it moves or transfers to your long-term memory where it can stay until you need to use it or retrieve it. Not every memory makes it past short memory otherwise we would remember everything! Many don't even make it past our sensory memory, meaning we never really even notice it is happening.
Click Here if your child is maybe more advanced and wants more information and detail on the topic or if you just want to learn more!