Step 2: Wood
So once you have your tools, you'll need something to carve. There are tons of different kinds of wood and they all carve differently. My recommendation (and the wood that I learned how to carve with) is basswood. It's cheap and you should be able to find it locally. The grain is small and the wood is soft.
However, it isn't crucial that you even know what kind of wood you have, so don't worry. Use what you have– that's part of the fun of carving wood.
Make sure the wood is dry; you'll have more control over it. Carving with wet wood adds a level of unpredictability, since as it dries it tends to warp and crack.