Step 1: Concept
The first step in character creation is coming up with your character Concept, a one or two sentence description of who your character is and what they do. Are you playing a "wizard following the traditions of an ages-old secret society, keeping the world safe from evil, power-greedy sorcerers who want to rule it"? Or are you more of an "agent of a shadowy government department that knows aliens are real and uses alien technology to keep humanity safe from - and ignorant of - the aliens"? Maybe even a "happy-go-lucky housewife, who was granted cybernetic limbs after a horrible automobile accident and has been drawn into a secret world she never knew existed" type?
Whatever you come up with, that's your Concept.
Step 2: Approaches
Your character starts with one Approach at +2 (Great), two at +1 (Good), two at 0 (Fair), and one at -1 (Mediocre).
Step 3: Skills
Your character starts the game with one +2 Skill (Extremely Skilled), two +1 Skills (Very Skilled), and four +0 Skills (Skilled).
Step 4: Gifts and Faults
Your character begins play with one Gift. Additional Gifts can be taken at the cost of one Fault.
In addition, a Fault can be taken for additional Skills; one Fault will grant one Very Skilled Skill, or two Skilled Skills, or one-half Extremely Skilled Skill (meaning that two Faults would need to be taken for one Extremely Skilled skill).
Finally, two Gifts can be traded for a Supernormal Power. Should you want your character to start play with a Supernormal Power, they would wind up with a Fault and a Supernormal Power (one free Gift, one Gift purchased with a Fault, both traded in for a Supernormal Power).