Measure the open exterior wall inside of the space between two wall studs, from the bottom of the ceiling plate to the top of the floor plate.
Stretch your tape measure on the floor to the length you just measured. Roll out the insulation next to it with the paper side facing up. Mark the paper at the length of the wall.
Lay a square across the insulation width-wise at the measured mark. Press the square firmly down. Cut through the paper backing and the insulation with a razor knife, running it alongside the square and completely cutting off the insulation.
Press the cut piece of insulation into the space between the two studs with the exposed fiberglass facing the outside wall and the paper side facing toward the room. Shoot staples along the vertical edges of the paper and into the studs every foot or two. Position the staples on the sides of the studs, near the top edge, to create maximum coverage of the space.
Cut the insulation around any electrical outlets or other obstructions in the wall.
Repeat for each space between every pair of studs on all the outside walls. Drywall directly over the insulation.