2. Open up Photoshop and paste the image you want to draw. Set the opacity of the image to 30%
3. Create a new layer on top of the Miffy image (CTRL+N) or Layer > New > Layer
4. Select the Pencil tool
Select the smallest 1px one
5. Now Zoom In on your image to make the tracing easier
Your image will look like this after it's been zoomed. Because the lines and the whole proportion is bigger, it'll be much easier to trace
6. Like tracing paper, trace all the lines with your pencil tool. If you don't want some parts of the image, just trace the parts you do want. When you're tracing / scribbling and you want to see how your scribbled areas look like, then use the
Visiblity Toggle to make the real Miffy image invisible so
you can only see the scribbled lines. Also when you're scribbling, trace the lines a couple of times so that it'll look more scribble style
7. Once you're done, zoom out so that it'll become 100% again. It should look something like this :
(with the original image at the bottom layer)
(the original image layer is invisible because I turned off the visibility)
8. Now that you're done, you're ready to colour. Use the
Eyedropper Tool to get the right original colours of Miffy. But you don't have to if you don't want to. You can just make
up your own colours if you want. There are different ways to colour a scribble, you can either use the 
Paint Bucket Tool to
paint Miffy solidly like this :
Or you could use the
Brush Tool. Make a layer beneath the outline scribble and then
select a medium small-ish brush to brush the colours with. Like this :
The Brush method is a bit harder, because it's easy to make the brush stick out of line. And you can also make some shadows with the Brush tool to make it more realistic. But the Paint Bucket tool is obviously easier since you just click on the areas you want to fill.
9. And you're done! When you get the hang of it, you can do more complicated images which have more details and lines.