how do I take individuals from the People list and group them into a cocntact group

When Hotmail grouped all my individuals just under the heading "People", I could no longer find the contact groups I had put together.  I send out monthly newsletters for non-profit groups and cannot find these groups.  I particularly need a group called CBW for Coastal Bend Woodturners.  It is a group of 32 people and it is not fun to have to go through the whole list of "People" and check each one of them.  Why do I have to do all this?  Why can't I just have a group as I had set up?  I am not happy with Hotmail and as soon as I have time if I can't get this changed so I have a group or groups I will change to another email service.  Can anyone help me?