Update Now - click this button when it shows up.
Check off Basic Protection
When finished installing, click on Restart Now.
After restarting, open AVG
Click Scan Now to run an initial scan with the updated version of the program.
IF you made a mistake and did NOT check off Basic Protection, and you ended up with a trial of the paid version, you can easily convert back to the basic free version:
Open Control Panel, Programs and Features and remove AVG 2014. You will be given an option to Downgrade to the free basic version. Select this to convert.
If you clicked on Later, instead of Update Now, and you want to update, don't worry, it will come up again soon enough.