1 - A brand-new Mac showing “Your system has run out of application memory” during normal Office use is not something you should have to accept.
2 - A restart may clear it temporarily, but repeated warnings usually point to a background process using excessive memory, a software issue, or less commonly a hardware problem.
3 - First, restart the Mac and install any available macOS updates. You can check for updates under System Settings >> General >> Software Update. Apple’s guidance for updating macOS is here: Update macOS on Mac
4 - If the message returns, open Activity Monitor (Applications >> Utilities >> Activity Monitor) and check the Memory tab to see what is consuming RAM. Apple explains how to use Activity Monitor here: View memory usage in Activity Monitor on Mac
5 - Since you recently installed Microsoft Office, it is worth checking whether any Office-related background processes or OneDrive are using excessive memory, even when the apps appear closed. Also make sure Office is fully updated.
6 - With only light Office use, an 8 GB Mac should not repeatedly show this warning.
7 - Other factors might contribute to this issue are:
Four Categories of Third Party Software / Services that are not needed
Get rid of them via the Developers Instruction
In no special order
1 - Third Party 2 Way Firewalls
2 -Commercial VPNs
3 - Third Party Security Software
4 - Third Party Disk Cleaners / Optimizer