To open Thunderbird's Account Settings dialog, go to Tools > Accounts Settings.
Thunderbird lets you customize a couple things relating to Local Folders. Local folders are a local (on your computer) repository of information independent from the email account(s) you have setup in Thunderbird.
The Account Name field lets you give a custom name to your Local Folders. In our case, we just renamed our Local Folders Local Emails. As you can see, this change is visible in Thunderbird's folder pane.
You can optionally ask Thunderbird to automatically Empty Trash on Exit by checking the appropriate checkbox. (While useful, enabling this option assumes that you never did -nor will- delete an email mistakenly. Your call!)
The Local directory input field tells you where your Thunderbird emails and profile are stored. You can change it, but we don't recommend you do without a good reason, (such as current hard drive or partition critically running out of space).
To find the root of your Thunderbird profile directory, go to Tools > Account Settings, and select Local Folders. The email directory is listed under Local Directory, and navigate up two levels.
The Local Folders' Disk Space settings are an derivative of the Local Folders item in the left pane of the Account Settings window. (If hidden, click the plus sign next to Local Folders.)
Thunderbird lets you automate the deletion of old emails, either using a numerical or chronological factor: emails more than X days old, or everything but the last Y emails. By default, Thunderbird never deletes emails without your explicit request.
If you receive enormous numbers of emails, you can check the Always delete read messages checkbox.