A domain name is the internet address of a site. (For example, websitesetupguide.com is the domain name of this site.) You'll need to choose a domain name.
A domain name will cost around US$10-20 per year, but some web hosts will give you one for free when you buy web hosting from them.
Web hosting is where your website actually sits, on a computer, in a building somewhere, when you put it on the internet. You'll need to purchase web hosting, to put your site on.
Web hosting is the only thing you have to pay for, to set up a website. Everything else can be done for free.
Likely Cost: up to US$10 per month.
Choosing a web hosting provider is not easy. There's a huge number of very similar web hosts out there, and 99% of the information about them is from dishonest "review" sites.
Feel free to do your own research into web hosting, but I think you'll find it mind-boggling.
I use FatCow web hosting for my sites, and I'm very happy with it. I switched to it because it has more positive reviews, on web hosting forums, than any other host I can find. It offers everything that a typical web host does, at a far lower price, and includes a free domain name. It also sells Canadian and UK domain names (.ca and .co.uk).
I've looked around for a cheaper alternative, but haven't found anything good that's cheaper than FatCow.
This is a link to a discount voucher for FatCow. (Make sure you visit FatCow through this link, because they'll give you 50% off the price.)
Click here to sign up for FatCow hosting and domain name ($3.67/month) >>
If you use FatCow, I can tell you exactly what to do, to set up your website.
Sign up with FatCow. It should take about ten minutes. Then come back here and continue.
Go to the site you bought your domain name from. Log in, and look for Domain Pointing or DNS. Set your first two name-servers to NS1.FATCOW.COM and NS2.FATCOW.COM. This will take hours to kick in, but you don't need to wait for it.
On the FatCow website, go to the Control Panel. Click Add Registered Domain to Account. Type in your domain.
Once you have web hosting and a domain name, the next step is to choose how you'll go about setting up your website. There are two main options.
Option 1: Read about making your site using the WordPress system. Click here >>
Option 2: Read about making your site using a Web Page Editor program. Click here >>