If you look in a folder where you open a Office document, .xls, .doc., .pst, whatever…. it also creates a file with the same name (or close to it) preceeded with a ~$. Getting a good definition of what these file are has been tough. Try Googling it and you will see. Some call them "Lock" files. Some call them "Temporary" files.
I can tell you what they aren't…. they aren't the AutoBackup/Recovery files used to recover the documents in case the program crashes. You can tell Excel where to keep those and by default they are kept in C:\Users\Users\AppData\Roaming\Microsoft\Excel (or word or whatever).
So what are the ~$ files created in the same directory when you open a Office document?
Best Answer
These files exist so that Office can report the user currently holding the file open.
Suppose you have a document on a network share and you want to edit it. Word tries to open the file, but that operation fails because the file is in use by someone else. You really need to work with the file, so you want to find the person who's holding it open and ask them to close it. If you had sufficient access to the file server, you could use the Shared Folders snap-in for MMC, but otherwise, you're stuck.
Therefore, Office writes one of these tiny files when opening a document. It records the display name of the current user. When another Office instance tries to open the file but gets an error, the Office program accesses this file and shows you the name of the person responsible for the lock. You can verify this in a hex editor: the first byte is the length of the display name, then the next run of that length holds the actual name. Then there's also some other data, some of which appears to be the display name again (but in UTF-16LE) and the rest of which I can't make out.
From Description of how Word creates temporary files (outdated but still helpful):