Once you've found at least 10 iron ore and 16 coal, head back up to surface.
You can keep mining, but since a minecraft day is only 10 minutes long, you should head to surface after about 7 minutes, leaving 3 to get home. When you get home, put the coal in the bottom slot of the furnace and the iron ore in the top slot. It should like this:
The iron should begin smelting, leaving a white ingot behind. This is your iron. Go to sleep then wait until you wake up. The smelting process won't go any faster, but no mobs will spawn.
Good morning! Go check your furnace. If it's done, and all the iron ore has smelted, take the ingots out and begin crafting.
The first thing to make is a bucket. Make a pick next, then a sword. You should have 2 iron left over. Put that in your chest. Today we are making a farm. Craft a stone hoe, then go outside to mine some grass. There is a chance you will get seeds. Once you have at least 6 seeds, fill your bucket up with water by going to a water source and right clicking. You should a have a water bucket now. Go back to your hill house, mine three blocks vertically or horizontally. It should only be one block deep. Place the water in it by right clicking with the water bucket. The water will be running, so if you prefer still water, take your empty bucket back to the water source and fill it up, then again place your water on the opposite end of where you last placed it. Now, take your hoe and right click the ground next to your water. Then right click with the seeds to plant them. If your having trouble understanding this, go to this farming tutorial: http://www.wikihow.com/Build-a-Basic-Farm-in-Minecraft After you make your farm, feel free to do whatever you want until night! Then, of course, you sleep.
CRAFTING RECIPES: ALL THE RECIPES FOR THE ITEMS IN THIS POST