It is all about how memories are transferred from short term memory into medium term and long term. Long term memory is fairly stable, and tends to remain stable throughout life - once a memory is 'filed' in your long term memory, it stays there.
However, as you get older, the capacity to transfer between different parts of your memory - and even retain information in your short term memory - decreases. Sadly, this is not something that you can do consciously, so it is very difficult to 'move' a memory that you really want to keep.
However, there is evidence to show that memory is like a muscle, and that by using your short term memory more, you can keep the synapses firing and keep your brain nice and 'fit'. THis is the theory behind the Brain Training programmes, although in reality, they tend to be very specific types of memory improvements - you might be able to remember numbers better on first glance, but you still might struggle with associating names and faces.
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