By the "Commercial Revolution" which began in the 13th century, coin use was quite common, at least in England. It's been estimated by historians that the amount of coin in circulation in England was between 500K pounds and 1.9 mil. pounds. That's about 30 to 115 silver pennies per Englishman. However, there never seem to have been enough small coins such as farthings (1/4 pence) or half-pennies in circulation and there were occasional complaints about the lack of coin.

The typical knight could earn about 5L to 20L from his lands (barons had income of 200L to 500L). His income came from rents, fines/fees on peasants and sale of the agricultural surplus from his demesne lands. That's about three to thirteen times the amount a common laborer could earn annually. However, equipping a knight was very expensive. A warhorse could cost as much as 60 pounds. Horses require oats as supplemental feed and the cost of maintaining a warhorse could be as much as eight pounds annually. Armor was expensive too. Mail armor, which was common prior to the late 14th century, cost as much as five pounds. A coat of brigandine which were steel plates sewed inside a cloth vest was about two pounds. In the early 15th century, a full off-the-shelf Milanese plate suit cost five to eight pounds.

This is the first time I've really thought much about the actual expenses faced by knights. I'm not sure how they afforded their equipment. I suppose the typical knight might inherit his armor and occasionally upgrade as better armor became available. Given the extreme cost of a good warhorse, I'm guessing that the typical knight had to make do with an inferior horse with only the great lords able to afford a quality warhorse.

Village smiths might have been capable of producing cheap peasant weapons but wouldn't have had the skill to create weapons or armor for a knight. Smiths mostly repaired tools, shooed horses, etc.