I currently have a registered domain. I was wondering if there is anyway I can create a custom email like example@mydomain.com for free using my domain? I cannot figure it out. Thanks.
Yes you can. It depends where you want to host your mail servers at. You can use the one with your registrar. You can also use the one hosted by Microsoft at Windows Live Admin center which I recommend.
What registrar are you using? You have to log into your account and change your DNS settings. Under the MX Record you can add/remove/modify the values shown in the Windows Live Admin center.