Spray your material with clear coat before carving. Let dry, then carve your letters. The clear coat seals the edges around the carved letters. Then spray you letters with any type of paint, ink, etc., a quick wipe with paint thinner removes most of the overspray. Not to much paint thinner so you don't remove the paint in the carved area. After dry, sand what overspray may be left. Then, stain/clear coat what ever finish you plan on using. If you don't seal the edges, paint will bleed into the surrounding grain edges, making a sloppy design.