You must first create your character sheet with the basic character creation points for starting character as described in the book (V20 Dark Ages). You must create a separate document with what you spend freebie points on. You may then spend your XP and document it on the same sheetbelow your freebie points spending.
XP is spent as follows!
ALSO NOTE: During character creation, we do allow the purchase of Background points with XP. The cost for this: 3XP for New Background, Current Level x 3 to raise an existing Background! After character creation, Background points will be raised during the course of play, through narrative events or Downtime Actions.