How to add labels:
When you click on the "New Post" button on your Blogger dashboard, you will see a page. To the far right hand side of the page it says LABELS at the top. CLICK ON LABELS and a TEXT BOX will appear. This is where you type in your labels. You can pick more than one and separate by commas. Be sure to hit DONE at the bottom UPDATE at the top to save what you typed. You can type a single word or phrases as long as you separate with a comma. Its kinda fun to think about what is the so what or main idea about your topic.
Here is the tricky part I didn't really understand before.
If you did not put labels on old posts that is okay. You can hit the design button and it will show all of your previous posts. Just hit posts on left hand side of screen. You can click on your old posts and hit LABELS to the right side. This is when you type in your labels just like you did with your new post. The labels will show up i promise you. It's like blogspot magic. Think of tinkerbell and fairy dust.
How DO THEY SHOW ON Your Blog:
Here is the other tricky part but it turned our to be sooo easy when I found the Gadget.
Decide where you want to place your labels. Click on LAYOUT on the left hand side of design page. It will give you several options to place your labels.
Labels is a choice in your list of Gadget Choices I didn't realize because I didn't scroll down far enough but it is there.
Click on Labels Gadget
For me i picked the choice of showing ALL LABELS because why not show your hard work of writing topics.
You have two choices Alphabetically or By Frequency. I picked Alphabetically to be more mysterious.
Other Two Choices List or Cloud I picked list.
Very Important final part Hit or click SAVE
I hope this helps anyone out there that was struggling with labels like me. I feel like it has opened up a new venue of people finding a topic they care about.