Pour half of the sugar in to an airtight container
Drop in the whole vanilla pods
Pour in the remainder of the sugar
Tightly seal the lid, then wait...
To use in a recipe, just take out the equivalent amount of vanilla sugar that you need.
Because most recipes call for so little vanilla extract, 2.5 ml (1/2 tsp) or 10 ml (2 tsp) I don't bother substituting with an increase in some other ingredient. It is rare to meet a recipe so delicately balanced that removing 5 ml of liquid will have any effect on the final result.
When the container with the vanilla pods gets down to about half way full, top up it back up with more sugar.
The vanilla pods are good for a year or more in a regular household kitchen. In my kitchen, I change the pods out every three or four months because I go through so much sugar on a weekly basis due to my baking exercises.