Some of my co-workers like to use Notational Velocity to store sensitive information. Though a fine application, I’m partial to my existing tools and wanted something more general-purpose and flexible.
To that end, I set up a simple encrypted disk image and configured it to mount with a password prompt when I log on.
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Open Disk Utility and select New Image from the toolbar.
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Configure the Disk Image. I don’t have any big files to encrypt so I opted for the smallest (10MB) image size. Select an option from the Encryption drop-down.
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In order to require password entry to open the disk image you’ll need to set up the permissions in Keychain Access.
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Under Access Control for the disk image Keychain entry, remove diskimages-helper from the list of programs always allowed to access the entry.
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In the Accounts Preference Pane, configure the disk image to mount on login.
Now simply select the mounted volume as the destination for files you want encrypted and sleep easy.

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