The first step is to choose the right location to place your home studio. Try to choose a room that's as neutral as it can be. You want to record the best representation of what's being played/singed. It's really important to to minimize reflections of the soundwaves when you record, so try to apply some carpets to the room.
The walls or the recording area around the microphone must be treated with acoustic foam. You have two alternatives. The cheap one is to use normal egg crates. This will work, but remember, it's only a cheap alternative. The best way to treat your walls is to apply professional acoustic foam. You will find all the types, how to set them up and the right prices here. Read the reviews, the tutorials, see what fits your budget, and order a pack according to your space.
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