How to blur background nikon d3000?

18-55mm standard lens it came with… I'm new to this but can't seem to figure out how to blur the background. I tried following some steps but can't seem to get it. Can you tell me how to step by step?

Added (1). I've been saving!

Added (2). Or should I buy a new lens since I can't afford a better camera for now, if so which would you suggest

Same as every single DSLR. Put it in aperture priority, open the lens as far as it can go, zoom in a bit and make sure there's some distance between your subject and the background. Now start saving for the new nikon 50mm f1.8 af-s

Here's a good article on the subject of dof - read and learn.
http://en.wikipedia.org/...h_of_field