Type the code from the image
Just like organizing files on your computer into folders and subfolders, you can organize documents and files in Sitefinity using Document Libraries and subfolders. Subfolders in Sitefinity are just Document Libraries the live inside another Document Library.
To get this to work start by going into your Documents & Files in Sitefinity
Now, click the button to create a new document library
Give your new document library a name and then make sure to indicate that you want to choose a parent library that this new library will belong to. When you select that choice a new button will appear allowing you to select that parent library.
When you click the Select a library button a new window will appear. From here you can choose the parent library and click done. Note that you can nest libraries multiple levels deep just like having folders within folders within folders on your computer.
So, it is worth admitting that even while composing this blog post, I would forget to switch the library that I wanted these screenshot images to be saved in. Realizing that after the fact is no big deal. Without leaving the blog post editing window I can bring up the image properties and move the image file to the right library.
From the properties screen (right-click your image or file link and choose properties) click the button at the top labeled Edit all properties (this button is in the middle of the screen when editing a link to a file).
The next screen has an option to change the library that the image or file is saved in. Clicking Change here will move the file to a new library. Save your changes by clicking publish on this screen, save on the next screen and then you'll get back to the screen you were working from before.