A common problem with using e-mail is an overcrowded Inbox. To keep your Inbox organized, you should move messages you want to save to other folders and subfolders, delete messages you no longer want, and create new folders as you need them. Storing incoming messages in other folders and deleting unwanted messages make it easier to see the new messages you receive and to keep track of important messages. If you can’t find a message, you can use the Search box (New!) to quickly find it. If you have not finished composing a message, you can save it in the Drafts folder and work on it later.
Create a New Folder
Click the File menu, point to New, and then click New Folder.
Type a name for the new folder.
Click the folder in which you want to place the new folder.
Click Local Folders to place the folder in the folder list.
Click one of the other folders in the list to make the new folder a subfolder.