Decide what size you want your finished book to be. Common sizes are 6" x 9" or 5.5" x 8.5". Measure some books with a ruler to get an idea of what different sized books look like.
Go to "Page Setup" in your word processing software. Choose "Margins" and set your page margins to at least .5" on all four sides. If your word processing software has an option for setting the gutter, set this to 3/8". Hit "OK" or "Save Changes" to set these margins.
Go to "Page Setup" or "Print Setup," depending upon your word processing software. Change the paper size to the size you chose for your book in Step 1 in order to make sure your margins apply to the right size paper. If your paper size is not listed in your word processing software, you may have to choose "Custom Size" and enter it manually. Hit "OK" or "Save Changes" to save the paper size.