You can create custom playlists of your favorite music right on your Windows Phone and then save them for later.

To create a playlist

Step 1: On Start, tap Music + Videos, flick to Collection, and then tap Music.

Step 2: Tap and hold an artist, album, song, genre, or even an existing playlist, then tap Add to now playing to add the music to a temporary queue.

Step 3: To create the playlist, you’ll need to open the now playing queue by doing one of the following:

– On Start, tap Music + Videos, flick to History, then tap the album art of what’s currently playing (or paused).

– Press either the Volume Up or Volume Down button on the side of your phone. In the music control that appears at the top of the screen, tap the artist name.

Step 4: Under the album art, tap the song that’s currently playing (or paused). This will take you to the now playing queue.

Step 5: Tap Save , enter a name for your playlist, and then tap Enter .

Tip: 

You can tap the Select button to choose several songs, and then add all of them to the now playing queue at the same time.

To delete a playlist

Step 1: On Start, tap Music + Videos , flick to Collection, and then tap Music.

Step 2: Flick to Playlists, tap and hold the playlist you want to delete, tap Delete, and then tap Yes.

Via: Windowsphone