Creating subfolders under document folder in Word for Mac

I am a new user of about a week and absolutely love my computer. I types lots of recipes, knitting patterns, etc. and have saved these under my documents folder. However, I would like to create subfolders; for instance, knitting, crocheting. Please tell me how to do that. All the sessions I read said "I know how to create a folder" but I do not. Please help.

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Open up Finder, and in the left sidebar click on the Documents folder. Now create a new sub-folder with the keystroke CMD+SHIFT+n and type in "knitting" and repeat this for all the other sub-folders you wish to create.

Now in Word, you can save your files to these sub-folders.