I always draw the pattern right out on the fabric because I have done it enough to be comfortable doing so, but you can draw it out on paper first if that will help you to become a little more comfortable with working with the pattern.
1. Take the fabric and fold it in half across the width, then spread it out on the floor or other large flat surface.
2. Mark out everything as shown in the diagram below using chalk or marking pencil (or if you are not comfortable enough to do that yet, use butcher paper). Start from the left side of the layout by drawing in the body first, and then drawing in the sleeves. The side panels are drawn out of what is left of the fabric.
Cut out all of the pieces on the chalk or pencil marks.
(Image from www.silverdor.org/viking/underdress.html)
Don't worry about the neckhole yet, I will show you how to cut out the neck hole using the measurements (a) and (b) later.
One of the ladies from one of my previous classes actually took the scrap piece that comes from between the sleeves and the gores and turned it into a right nice little head scarf, by sewing the two pieces together down the long side, with some pretty embroidery and ties on it. She also used the scrap piece above the sleeves and gores for a facing in the neckhole on the garment, thus leaving very little waste fabric.