Don't confuse balsa foam with balsa wood; balsa foam was created specifically for the creation of models. It has comes in varying densities with different "memories." The less memory your balsa foam has, the less the foam with try to expand back into its original shape and will hold your carving. Because of this, and the fact that it can be carved with just about anything, it is becoming the material of choice for designers and beginning mould makers.
Transfer the basic shape of your design to your balsa foam block by outlining it with a permanent marker. Balsa foam is best used for relief moulds, meaning that you will be pouring your latex (or similar material) on top of your mould rather than into it.
Rough out the shape of your mould by cutting away portions of the balsa foam that you do not need with a pen knife, just as if you were carving a block of wood. You can also remove large portions quickly by making incisions with the pen knife and then scooping out the area with a metal spoon. Remember, remove only what is not needed for your design but leave more than what you will need in your design; in other words, if you are creating a mould of a face, remove the foam around the face but leave extra where the nose and lips will be so you can carve down into it.
Use an emery board to shape the balsa foam. This will allow you to create fine details in the foam without worrying about removing too much. Use both sides of the emery board to do this. Use the rough side to remove foam quickly and the fine side to shape fine features.
To create depth in your foam mould, press objects into it. A pencil eraser can be pressed into foam to give depth to nostrils of the mould of a face, for example. Experiment on an extra piece of foam, and find what will create the impression you need.
Spray your mould with several coats of Krylon plastic spray coating to seal the foam. This step is necessary to allow you to cast your mould without your cast gluing itself to the foam. Make sure you let each coat of Krylon dry completely before applying the next; four to five coats is usually sufficient.
Making a mould with balsa foam requires patience and practice. Keep several scrap pieces around, and before you carve or press into your final mould, try it out on a scrap piece to make sure you like the result. Remember, the beauty of balsa foam in that it will not recover its original shape, which also means that any mistakes you make will stay.
Work in a well-ventilated area to prevent yourself from being overcome by spray fumes or any incidental dust created from the carving.