First, gather what you have:
Photos - Pull all of your photos out of magnetic albums, and get out those shoeboxes full of pictures you've been storing forever. Start first by organizing them. I've always been told to sort by year (if possible), and that is really my own preference as well. It tends to be the easiest way when you're first starting out. Then once you've got your different years all sorted out, you can then go back and put each year pretty much into chronological order. If you have decades full of old photographs to go through, then you should start by sorting them according to their decade (i.e. 1960's, 1970's, 1980's etc.).
However, some people start by organizing and sorting photos by subjects, such as events/occasions, activities, people, places, things, time, destinations/vacations, etc. Then you would want to sort each subject into chronological order. After sorting I would recommend placing these photos in an acid-free envelope or container and labeling it. This makes it easier to locate specific photos later on, when you're ready to begin working on your various themes.
Mementos - Go in search of anything you may want to preserve in your albums along with your photos. The items you have saved can really add more to the story of your theme. Some examples are ticket stubs from different events, passes, post cards, dried flowers, newspaper articles, brochures, hair clippings, invitations, old ribbons, small objects, letters, ribbons, awards, certificates and many more. Almost anything that is somewhat flat and that will fit on a page could be used. Use your imagination.
Next, round up your supplies:
Album - There are many different types/price ranges to choose from such as three ring binders, book bound/flexible binding type albums (like Creative Memories sells), and spiral bound albums. Sizes vary greatly too. Common sizes you'll find are 12x12, 8x10, and 5x7.
Some things to consider before deciding on a style, size or color of the album you'll choose:
This is very, very important. Do not use magnetic albums! Be sure to choose an archival quality album. The paper and adhesives in most magnetic albums are usually very high in acid, which in turn causes rapid deterioration of your photographs and keepsakes.
Make sure to choose an album that looks and feels sturdy. It will be handled a lot over the years.
Three ring binder type albums usually have plastic slipcovers with which you slide your pages into. Then you lock these in the three rings. The book bound/flexible albums have pages that have little staples on one side of the page. These are held in the album by a strap that you run through, basically buckled in place. These latter type albums usually do not come with plastic protective page sleeves (or simply referred to as sheet protectors); it can be optional. But in my experience these should be a necessity for anyone choosing to use this type of album, as they protect the pages from dirt, stains, spills, etc . . . as well as helping to hold your photos and mementos in place. Just a reminder, they are usually sold separately.
Cutting mat - These can be found at your local fabric stores. A good size to use is 12x18 or 18x24. Using this saves your tables/countertops from cuts and puncture holes. If you cannot afford one starting out, a large piece of flat (thick) cardboard works well (like a flattened box).
Paper - For three ring binder albums you'll need to buy appropriately sized paper to mount your photos on (i.e. 8x10 paper for an 8x10 album). Book bound/flexible albums already have paper pages included in them. Always use card stock, acid free (and lignin free if possible) paper.
Other paper (optional) you'll need for variety in page designs are as follows:
Solid colored paper
Adhesive - There are many different kinds of adhesives available today. Some of the most commonly used are:
Photo mounting squares
Photo cement (Not rubber cement)
Scissors - Small and sharp work the best.
Paper trimmer/cutting board - This is by far not a necessity, but it sure makes the craft of scrapbooking so much easier. It allows you to cut long/large pieces of paper, and you have the added benefit of perfectly straight cuts (which you don't always get with scissors).
Eraser - Either a kneaded eraser, or a large white is best. Lastly you could use a Pink Pearl (common large pink school eraser), but these tend to use up fast and sometimes don't seem to work as well.
X-acto Knife and Blades - These can be found in crafts stores, grocery stores and most hardware stores. It looks like a pen or pencil with a triangular piece of razor blade on the end.
Ruler - Any 12" ruler will do just fine. If you decide later you need something a little longer, just get a 16" clear plastic right angle ruler.
Pencil - Any soft lead pencil will work fine.
Pens - You'll need to start out with at least one acid free (photo safe) archival quality pen. This will be used mainly for journaling, although having many colors/styles of acid free archival quality pens lends flair as well as variety to your pages. There are writer pens, scroll and brush pens, calligraphy pens, fine and chisel pens, and gelly roll pens. If you only plan on using one for now, a black writer is the best choice.