This article explains how to encrypt files with TrueCrypt. Use these steps to set up a secure file container (an encrypted virtual disk) on your PC using this software.
True Crypt – How to Encrypt Your Files Linus Tech Tips
Once you have installed TrueCrypt, launch the software from your programs folder and click the Create Volume button (outlined in blue on the screenshot for clarity) in the main TrueCrypt program window. This will open the "TrueCrypt Volume Creation Wizard."
Your 3 options in the wizard are: a) create a "file container", which is a virtual drive to store the files and folders you want to protect, b) format and encrypt an entire external drive (such as a USB flash drive), or c) encrypt your entire system drive/partition.
In this example, we just want a place on our internal hard drive to store sensitive information. So we leave the first default choice, Create a file container, selected and click Next >.