Edward Joseph Mahoney was born into a large family of Irish Catholics in Brooklyn. His parents were Dorothy Elizabeth (née Keller), a homemaker, and Daniel Patrick Mahoney, a police officer.[3][5][6] He grew up in Levittown, New York,[2] on Long Island[4] but also spent some teenage years in Woodhaven, Queens.[7] Money was a street singer since the age of 11.[3] As a teenager, he played in rock bands, in part to get dates from cheerleaders.[2] He was thrown out of one high school for forging a report card.[1] In 1967, he graduated from Island Trees High School.[3] At the age of 18, he tried to follow in the footsteps of his police officer grandfather, father, and brother as a New York City Police Department trainee.[8] However, after working as a clerk and typist, he left in 1968 to pursue a career in music,[1] as the police did not allow him to grow his hair long.[2] “I couldn’t see myself in a police uniform for 20 years of my life, with short hair,” he later said.[8] His bandmates also fired him because they did not want a police officer in the group.[3] His father was not happy with the decision to play music and tore the Jimi Hendrix posters from his wall.[2]

In 1968, Money moved to Berkeley, California.[9] There, he studied with Judy Davis and took on the stage name Eddie Money, dropping a few letters from his name and sarcastically referencing the fact that he was always broke.