the password is a save system.
only use it when you have a password. Otherwise just do "new game".
When you pass a savepoint, write down or make a picture of your password you get, this you can use if you quit and and want to continue where you stopped. Remember, everytime you save, it'll be a different password. At the end of the game, there is a chance to get 1 of the 3 secret passwords.
I hope this helps!