Create a category in windows live mail 2012

I've read and reread your article about the work around of sending a mailing to a category of recipients, but I cannot seem to find a place to create the category in the first place. They simply say Open Windows Live Mail and go into your contacts. I cannot see a place to open my contacts. I have checked out each of the menu items and still don't see it. I can opne a new e-mail message and when I click the "To" link, the contacts opne, but there is no place to create the category there in the first place. The only thing I have done, which is a pain, is to open a new e-mail and manually choose the recipients. I can save that as an *.eml document that I can open up, but how do I create a list that can be changed on an ongoing basis? Thanks for your response.