It's a good idea to keep sensitive data inside an encrypted disk image -- especially if you are a notebook user. With OS X, standard read/write disk images take up all of the disk space you allocate to them initially during creation, but with a sparse disk image, you can create an encrypted disk image that will only grow in size when you add files to them. Let's get to it: 1. Open 'Disk Utility'. ----- 2. Choose 'New Image' 3. Choose a name, select your maximum size that you want the disk to grow to, select AES 128 encryption, and Sparse Disk Image. Then click 'Create'. 4. Select a password. If you want to test the strength, click on the 'Key'. For extra security, I recommend you UNCHECK 'add to keychain'. 5. Your disk image will be created. 6. Now you can drag/drop files into your disk image. When you are done, eject the disk until you need to use it again.