Create some Merits for your character and divvy 25 Points between them. Merits are statements about your character.
Words vs. Points: You can create your character’s Merits as tidbits of history: “I used to break horses with my dad.” You can phrase them as simple facts about your character: “ I’ve worked with horses and I know how they think.” You can phrase them as attitudes: “I’m very comfortable working with horses.”
You can’t give your character more Merits than you’ve got points to assign, and the maximum amount you can have in any score is 5.
I prefer to write four or five Merits and then divvy my points between them, rather than assigning points as I go, but you might prefer the opposite. Either way, assign more points to the Merits that are most important to your idea of your character.
If you can’t think of any Merits to start with, try this trick: write “I’m a good shot” on your character’s sheet. (“I’m a good shot” is always a safe take.) Now ask yourself: where did my character learn to shoot? From whom? What were the circumstances? Tease a second Merit out of those circumstances, something like “I used to hunt with my brother” or “I once killed a wolf that was killing my family’s calves” or “I fought a year in the Territorial Army.” For your character’s third Merit, choose something unrelated but opposed, for balance: “I’m a good cook, too,” maybe, or “I’m well-read,” or “I know the names of the constellations.” Now you’re underway, and it should be no problem to come up with a couple more Merits as you need them.
You don’t have to assign points to match competence at all: you might take “I can’t see well without my glasses 4,” for instance. When you do so, you can create a flaw. The maximum score any flaw can be is 4, and for every 1 point you spend in it, the score increases by 2. Flaws can be used like merits, and can be used to benefit you in a situation, but your opponents may also use them against you. Whenever an opponent uses your flaws against you, you receive an amount of Karma equal to your flaw’s score.