At around 7- 8, when my daughter inquired, I just said that mommies have what's called a "period" or menstrual cycle, and once you reach a certain age, around 12 or 13, your body will start maturing and preparing the uterus , every month, for the day when you become a mommy. Each month your uterus goes through a cycle to build a nice place for a baby to grow. When it's not needed, your body gets rid of it and gets ready for the next month. It's a different kind of bleeding because your body is doing what it is supposed to be doing (i.e. as opposed to cutting yourself and bleeding.) Your daughter may be able to grasp the above conversation.
When my daughter was around 5, she was good with the answer...."It's called a period, something private that happens to older girls and women and every month they bleed from a special place and that's very normal"... She had seen people pregnant, too, and had heard about periods but what she needed reassurance with was that she wanted to make sure the blood was nothing to be alarmed with - then she needed to pack her own private items so that she would never be caught off guard when the moment arose!" (First born!)
Good luck.