Disk images make the perfect backup file. Without any extra software or cost, Mac OS X will compress and encrypt the data into a single file that can be copied anywhere.
While most backup programs need to be installed on a computer in order to be able to decrypt and read the backup, encrypted disk images can be opened on any Macintosh.

Creating the disk image with Disk Utility.

Disk Utility is located in the Applications/Utilities folder on the hard drive. Most people only use Disk Utility to repair disks and permissions, but it can also be used as a backup program.

Go under the File menu and select New. A pop-up menu will show up with two options: Blank Disk Image and Disk Image from Folder. Choose the Disk Image from Folder and a dialogue box comes up and asks you to select the folder that you wish to backup. After selecting the folder that you want to back up another dialogue box appears asking you to name the disk image to be created and specify the type of disk image to be created. For backups, select compressed for Image Format and 128-bit AES encryption for Encryption. Mac OS X 10.5 Leopard adds the option for 256-bit AES encryption with is more secure, but takes longer to create and open up. Next a box appears asking you to enter a password for the encrypted disk image. Choose a difficult password because disk images can be opened if someone can guess your password. Microsoft offers a free online password strength tester and notes about creating passwords that cannot be easily guessed.

Selecting the Save Password in Keychain option means that the password to the disk image will be stored under your account information on that Mac. The image can be opened up by manually entering a password. If you are the only user of that computer, then this option can save time. However, if you share the computer with other people and do not have separate user accounts, then they can open the backup file too.

Now that the file is created, the image can be moved to another computer or flash drive in case the primary hard drive fails.

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