Well, I should have tried a bit harder before posting this. I figured this out, so since this post is already here, this is the correct way to do this (or seems to be the correct way to me anyway)
Add a user defined search path from the component libraries menu by navigating the the folder you want to use and selecting that folder. You are then prompted to use a relative path, click yes.
Kicad will now search this location for libraries. In order to add the libraries that exist there to the project you need to edit the .pro file of your project. I did this using a text editor, because I couldn’t figure out how ot do it through the Kicad GUI. Just add the name of the library you want to add to the list of libraries in the .pro file. If your library is called “MyLib” then see example below.
The one thing I haven’t figured out yet is how to tell Kicad to look in your library first if you have a library named the same as a default kicad library (default kicad libraries live in “Program Files\KiCad\share\kicad\library” for me, I am running Kicad 4.0.2 on Windows 10.
Does anyone know the right way to do this if you wanted to not use the Kicad standard libs? I could just delete the files located in that folder but that seems like the wrong way to do that.
Also, every library in the standard kicad libs folder has a .DCM file as well, what does this file do?