1. Pick out a word to do a cutout of!! Hehe... I suggest your name or something, just to start out with.

2. Open a new image, I'd say roughly 400 pixels wide and 300 pixels high... Should be 24 bit color, and the background color can be your choice. The longer the word you chose, the wider the image.

3. If your word is 5 characters or shorter: Click on the shapes tool and go to the Controls box for it. Select a Circle, outlined style, outline width at least 12, but no more than 20. Depends on how big you're making it. Select a foreground color for your circle frame, and then make a circle on your image.
If your word is longer than 5 characters: follow the steps above, except select the shape "Ellipse" instead of "Circle".

4. When you have a circle/ellipse of your desired width and size, open the text tool. I suggest for beginners to use the font "Arial Narrow" in Bold for their first time, because it's a simple font. But, you can use any font you desire. Narrow, bold fonts will turn out best. In the "Add text" box, enter the first letter of your word only. Select a text size so that the text is just about as wide as the circle/ellipse you just put on.

5. You want the first letter to be touching the left inner edge of your curve. If it doesn't look right, simply undo it and try a different font or font size. You may need a few tries to get it right.

6. Now you want to enter the second letter. Basically repeat step # 4. The second letter should be touching the first letter a little. Now enter a third letter, which should be touching the second, and so forth.

7. It may be awhile before you have all your letters entered and fitted properly. If your letters don't seem to fit, you may need to start over with a larger circle/ellipse or a narrower font. If you've gotten all your letters in and your last letter doesn't touch the inside of your circle/ellipse, then you may need larger font, a longer word, or a smaller outline shape.

8. Congrats!! You got through the tough part... Now comes the fun. Use the magic wand tool to select both your circle/ellipse and your letters, and apply any desired effects to them. I'm a fan of BladePro myself, and BladePro effects look lovely on wide shapes and letters.

9. You should have your shape and letters all ready now, and still selected. Go to Edit, Copy. Now pick out a background you have... Something simple that matches the frame and doesn't distract the eye from the shape and letters too much. Open the background.

10. Now it's time to put your shape and letters onto your background. You can do this one of two ways...
(a) Open a new image, and copy and paste the background onto it. If the background does not cover up all of the image, keep pasting it onto the places it doesn't cover. Now copy and paste your frame and letters onto the image.
- OR -
(b) Resize your background so that your shape and letters will fit onto it. Then copy and paste them onto it.

10. You're almost all done! This step is optional, but you can put on some finishing touches... Such as sparkles, or similar small decorations.