How to create folders in Gmail?

As such there is no option for creating folders in Gmail but with a minor tweek you can get the essence of folders in gmail. It can be done in three simple steps:-

1. Create a label. 
2. Apply the label to the mail.
3. Archive the e-mail.

These steps will move your mail from the inbox and give you a feeling that the label link is your personalized folder. Visit this link for managing labels.