In today’s hyper-connected world, children are increasingly exposed to digital platforms that may put them at risk of cyberbullying, predatory behavior, and inappropriate content. Although there are many parental control apps available, most of them perform poorly due to over-monitoring by sending parents excessive and non-prioritized data or lack sufficient customization to effectively address real threats. In this study, we propose KeyAware, a groundbreaking solution in the form of an ethical keylogger designed to navigate the balance between privacy and security. KeyAware was developed in Python, utilizing the pynput and pyautogui modules to record keystrokes and capture periodic screenshots, with AES encryption applied to protect log keystrokes, as well as stored and transmitted data. In addition, a graphical user interface is designed to allow users to configure settings based on their preferences, such as email alerts, defining sensitive keywords, and screenshot capture intervals. The system runs quietly in the background while following ethical practices, such as requiring consent and applying encryption to safeguard captured data. The results show that the keylogger accurately captured keystrokes with an overall detection accuracy of 96%, detected predefined keywords, and delivered timely alerts without slowing system performance. Lastly, a user survey involving 30 participants was conducted to assess usability, transparency, and ethical alignment. The majority of users reported satisfaction with the system’s ease of use, low resource consumption, and emphasis on privacy and informed consent. Overall, KeyAware achieved a total score of 4.53 out of 5, which shows strong user acceptance and confidence in usability and security features.