Open up a Word document and select "Autoshapes," then "Basic shapes" and then "Oval." Draw an oval on your document and then double click to get its properties.
Under "Fill Effects" you can do soooo many things to your circle. For Murphy's tags I used a pattern that looked like an argyle pattern and then selected colors. But you can also add a picture too!
After the circle was the correct size, patten and colors, add a text box. I used my current favorite font, Champagne and Limousines from DaFont.