Create a new folder on your local filesystem.
This folder can be located anywhere, but you need to make sure that the user account under which Tomcat will run has full read/write access to this location.
Create a new database for Alfresco Community Edition.
It's good security practice to create a new user account for Alfresco Community Edition which only has permissions to this database.
For PostgreSQL, run the following commands:
create database alfresco encoding 'utf8'; create role alfresco LOGIN password 'alfresco'; grant all on database alfresco to alfresco;