Step 1: Click the "File" tab -> "Info" -> "Protect Document" -> "Encrypt with Password"
Step 2: Type in a password and click "OK".
Note: Tutorials on how to choose a good password is located at https://docs.rice.edu/confluence/display/ITTUT/Passwords
Step 3: Reenter the password and click "OK".
Step 4: After choosing a password you should see that your document is encrypted.
If you are e-mailing or distributing the file, it is recommended to use an alternative form of communication to share the password (e.g. phone call). For example, do not send the password in the same email as the encrypted file.