Once you open Microsoft Word, use the "View" tab to make sure the Gridlines box is selected. This will help you get the perfect alignment.
Next, create a text box for each of your initials. Remember, monograms are displayed in the order of first initial, last initial, and middle initial. Make sure your text boxes have no line (border) and no fill selected. You can do this by right clicking the text box border and going to "Format shape."
Here's an example with lines, and it's obviously not the look you want:
You can create a monogram in any font you like, but I downloaded the free font "Monogram KK" here. I made my first and middle name initials ("R" and "E") 100 pt and my last name initial ("M") 175 pt. You can play with the size ratio until you achieve the desired look.
The image below is what you get once you format your font size and text boxes. The grid really helps check your letter alignment!
After you're happy with the alignment, you can play around with font colors. I used Word's Insert > Shapes tool to create a circle around my letters. The potential combinations for shape outline, shape fill, and font color are pretty much endless, so you're sure to find a look that is perfect for your project.
Finally, I inserted a photo of a Lilly Pulitzer print to create the background. (The alignment is a little off here due to imprecise cropping, but you get the idea!)
To save the final product, I just took a screenshot of the Word screen and cropped the extra space out using Paint.
If you create a cute project, tag me so I can see!