Go to the contact tab in your profile.

Under All Contacts, you will see the small text Click here to add a group.
You read it right, click the text to add a new contact group. 

Give your contact group a name. 

Hit Enter on your keyboard and the name is saved.

To add contacts into the new group, click the add icon next to the group. 

Add the contact and they will now be displayed in their chosen groups.

Change the order of the groups by simply dragging the groups around using the drag icon. 

Delete the groups by clicking the trash icon.

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