What are the types of money?

There are a few kinds of money. The money we use today, like the US dollar, is called fiat money. It has value because the government says it does. We all just agree it's worth something. It is not backed by gold anymore.

A long time ago, people used commodity money. This was an actual item, like gold, silver, or even salt. These things were useful on their own. You could use them for other things, not just for buying stuff.

Also, a lot of money is just digital. It is the numbers in your bank account. Banks create this money when they give loans.