Memory is categorized into three major systems: sensory memory, short-term memory (STM), and long-term memory (LTM). These systems differ in their capacity and the duration for which they can hold information. Sensory memory captures raw sensory input from the environment, holding it for just a few seconds or less. For example, on hearing a brief, loud sound, like a car horn honking, the sound seems to linger in the mind for a moment even after it stops. This is an instance of sensory memory that holds auditory information for a few seconds, allowing the person to replay and process the sound if needed.

Short-term memory is the next stage of memory processing. It actively processes information received from sensory memory and holds it for a longer period, but still only for a short duration. An example of STM is remembering a phone number just long enough to dial it. This memory system is also responsible for transforming information into more meaningful content. For instance, when viewing visual patterns, STM helps convert these patterns into recognizable shapes and objects.

Long-term memory is the system responsible for storing important information for extended periods, ranging from minutes to a lifetime. This includes recalling childhood events, knowing how to ride a bicycle, and retaining vast amounts of information such as personal experiences, knowledge, and skills. LTM is not limited by the amount of information it can hold, and its duration can be lifelong. For instance, one's knowledge of a second language or the memory of a significant life event is stored in long-term memory. The ability to retain and recall information from LTM is critical for learning and everyday functioning, allowing individuals to build upon their previous experiences and knowledge.