How to create a custom friend group:
With your client open, type Ctrl+F or go through the Livejournal menu and select "edit friends"
Go to the "Friend Groups" tab.
Click the icon on the most left that looks like a square box (to the left of the red x).
Type in a name for your custom friend list.
Select which friends you want to "add to group" which will put them in a list in the right window.
When you are done selecting which friends you want in that custom friend list, click the button that says "Save Groups & Lists" (REMEMBER TO DO THIS)
Click OK when you are done saving.
How to post a protected entry using a custom friend group
In the Security Level option, there is a drop-down menu with the options: Public, Private, Friends, and Custom... Select "Custom" in this drop down menu.
You will then be given a list of your custom friend groups that you created. Check the box next to the friend group you want the post to be limited to.
Your post will then be only visible to those friends listed in that group.
This custom group will also be saved for any future posts you may make. You can also create multiple custom friend lists.