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Zach demonstrates how to save a Word document on your computer for better organization and backups. He shows two methods: going to the file menu and selecting "save as," or using the shortcut "control S" to bring up the save as menu. Zach creates a new folder named "school 2014" to keep the document organized, and saves the file within that folder. He emphasizes the importance of backups and closing the document without losing any progress. The saved document is easily accessible in the designated folder in the Explorer window.