How to setup a Personal Folder in both Outlook 2003 and Outlook 2007:
1. In Outlook go to the File menu on the top left hand side of your screen, choose New, then Outlook Data File.
2. Select Office Outlook Personal Folders File (.pst), click OK.
3. Type in for file name archive.pst, click OK.
4. Click OK. You will be prompted to put in a name for the personal folder. (You can add a password to this personal folder, but we don't recommend it. If you forget the password there is no easy way to get it back, if at all). Then click OK.
5. Your new Personal folders will now be in the Outlook Folder List.
6. Once These steps are completed you are able to drag and drop emails to the folder that you have just created to clear up space in your email box.