The problem is I store many passwords on my laptop - passwords and other confidential data in word/excel files that provide access to my email accounts and other sites. I'm afraid of this falling into the hands of the TSA people.
I suggest you stop storing your passwords in Word/Excel and use something much better like fSekrit. Also, make sure you have a good passphrase. Even 1024-bit encryption would be practically useless without a good passphrase.
The worst imaginable pass phrase (eg, "this is my secret password") is many times more secure than an average single word password (eg, "god123"). And it's easier to remember.*
Yes, well the problem with that is that so many systems/programs put such arbitrary limits on the "password", (eg. 3-8 characters consisting of at least one character from at least 3 out of the 4 groups: lowercase, uppercase, number and symbol), that it makes picking an easily remembered "passphrase" a joke.
I used to have all my program serial numbers in a plain text file which was then encrypted using my PGP key, (which was 2048 bit and a passphrase of 25 odd characters). Very secure but an exceeding PITA when I needed it and didn't have PGP handy
Nowadays, just a self-extracting encrypted RAR executable - much more convenient and WinRAR's encryption is very strong.
Also, I picked up an imation Atom flashdrive. Comes with software that lets you make an encrypted partition, if the wrong password is entered 3 times, (or was it 5?), it formats the drive. If you are accessing the encrypted section and you unplug it, it automatically locks it again. Even better, it's very, very small - smaller than a Type A USB plug.
But if you wanted to carry your data with you in a non-obvious way, I would suggest grabbing an 8GB MicroSD flash card - encrypt your data, put it on it, hide it - I very much doubt that they would be able to find it with a cursory search or even using the airport x-ray machines. Don't carry the reader, otherwise they'll know what to look for - just buy a reader at your destination.
Being both cheap - and sneaky - I like to supplement my security with a little bit of "low-cunning" rather than rely exclusively on technology.
One thing I always do is never put real passwords in my password manager.
I have set of arbitrary conventions whereby one (or more) characters in a saved password is always incorrect. For lack of a better word, let's call these conventions "fake-outs." You can do this in a number of ways:
1) Numeric Bump Fake-Out - add a certain number to another number.
ex: Bump the last two digits by 2 (use modulo if digit rolls over)
Real Password: ARB&1111 becomes Stored Password; ARB&1133
Real Password: Trx119AB becomes Stored Password: Trx131AB
2) Bogus Character Fake-Out - put a "red herring" in your password
ex: Always insert fake character in 4th position
Real Password: abcd1234 becomes Stored Password: abcW
d1234 (4th char W is faked)
There are thousands of other ways to do this. And they can be combined. Get creative and come up with one you can remember. Just make sure you are consistent when you apply it.
If you're a real paranoid freak, you can come up with several schemes and use them at will. You could assign each one a code (ex: A B C D) and use that as the prefix for your faked password (ex: any password beginning with "A" uses the numeric bump method - so ignore the A and compute the real password from what's left). That way, even if somebody figures out one fake-out, they still don't have the "secret decoder ring" for the rest of your passwords.
Fake-outs do increase your security exponentially - even a cracked master password and access to your password manager won't give away your real access codes. But it does prevent you from using the automatic login feature of your password manager. Sorry, nothing is for free.
So welcome to Little Orphan Annie's Inner Circle! (Here's you secret decoder ring.) Now all you need to do is decide how much security you really need - and how much you can tolerate. Just watch out for those waterboards!