The 'gauge' is the amount of distance between the rails of a track. The 'scale' is the relationship between the size of the model train and the size of an actual train. Beginning model railroad enthusiasts sometimes interchange the two terms, although they do not mean the same thing.
The most popular model railroad scales are O, N, HO, and Z. The O scale is the largest of the model railroad scales, and N is the smallest. There are several things that can influence which scale you choose to work with. The main consideration is how much space you have available for your layout.
If you are going to be building your train layout in your home, you should find a spot that is out of the way but easy to get to on all sides. The width and length of the space you have available will have a lot to do with how you design your layout.
Some hobbyists build layouts in spaces only about a foot wide, but it is impossible to include 180 degree curves into a trace space that narrow, so it is impossible to turn the trains around. In such a layout, it is possible to build switching stations similar to freight yards and industrial areas of real railroad lines.
These designs incorporate trains that run back and forth along parallel tracks, picking up and dropping off freight cars when they switch onto track spurs.
Another consideration for which scale to select is, believe it or not, your age. Age is something to consider because sharp eyesight is required for smaller scale models, especially if you are going to be doing a lot of painting, detailing, and applying lettering or decals.
Sometimes even people with good eyesight need to use a magnifying glass to read the smallest lettering on small-scale model cars. But if you try to read the larger print on a small-scale train and find that your eyes have a hard time making out the letters, then you may want to avoid working with any scale that is smaller than HO scale.
No matter how wealthy you are, the bottom line about choosing a scale may be the cost. Usually the most cost-effective model railroad scales are HO and N. The O scale, which has larger trains and larger equipment, as well as the tiny scale Z, are usually more expensive.
Before you buy or make any decisions, spend some time at your local hobby store looking over their offerings and talking with the store personnel to get a feel for how expensive the whole layout might be. You'll be able to get a feel for the amount of money it will take to get started and how much it might cost to develop the layout you have in mind.
Remember, though, that the train cars themselves are just going to be the beginning of your costs. You may end up spending even more money on track, hardware, lumber, modeling materials for landscaping and scenery, model buildings, and other accessories for your layout.
If you live in an area that is populous enough, you may be able to find a local model railroad club. A club such as this will give you access to any layouts owned and managed by the club, and you can make friends with other enthusiasts to swap suggestions, share stories, and pass along ideas and strategies.
Model railroading can be a fascinating and enjoyable hobby, but as with most hobbies, it is even more enjoyable when shared with like-minded enthusiasts.