Recommended Home Recording Gear
AFFORDABLE EQUIPMENT SUGGESTIONS TO TRACK YOUR SONGS
If you are on a Mac, I recommend Garage Band as it is straight forward and included free on Macs.
If you are on a PC, I recommend Pro Tools First. It is free though you are limited to 16 track counts which should be enough for smaller projects.
I would always recommend purchasing an interface with at least 2 mic inputs like the Focusrite Scarlett 2i2. Having the ability to use 2 mic at once allows you to utilize many common acoustic and electric guitar amp recording techniques. If you are just recording vocals or electric guitar/bass DI tracks (the dry track captured by recording the instrument directly into the interface without an amp) a one mic input option such as the Focusrite Scarlett Solo may work for you.
There are many different mics out there and they all serve different purposes and work better on certain sources than others. Here are a few recommendation for commonly recorded instruments.
Vocals: For most singing application, I would recommend the Audio-Technica AT2020. If you are doing rap or gritty rock/metal vocals I would recommend the Rode PodMic as it captures louder more percussive elements clearer.
Acoustic Instruments: From acoustic guitar to piano and everything in between, natural non-amplified instruments are usually always captured best by Condensor microphones. Continuing with the affordable recommendation above, the Audio-Technica AT2020 could also be used for acoustic instruments. These also often sound best when captured with 2 microphones at once. A pair of condenser mics can be purchased specifically for these circumstances. I would recommend the Rode M5s.
Guitar/Bass Amps: If you are planning to sending these to a professional producer or mixer, I would always recommend sending them the DI (instrument played directly into the interface - no mic) as they may be able to use this to create fuller and more polished tones. If you are planing on recording your own amps, I would recommend using the Shure SM57.
4. Bonus: DI Box
There were a few mentions above about DI tracking. DI stands for "Direct Injection" and refers to capturing the audio signal directly from the instrument such as an electric guitar/bass prior to any effects or the amp. This technique provides a lot of flexibility in modern recording from easier editing to expanding the tone creation possibilities.
DI tracks can be captured using the instrument/line of Hi-Z input on your audio interface, but for the best results a DI Box is recommended. This serves to capture the complete instrument tone and bring it to the interface at the best quality possible. For most circumstances I would recommend and active DI box. My personal favorite is the Countryman Type 85.