Work up to it.
You say, "Sometime this year". Sounds like you may have time to prepare by trying some smaller, less terrifying, events. Have you ever been part of an informal jam session? Get a few people together with guitars and play and sing together. Can you find some kind of public area where it's okay if you sit with your guitar and sing to yourself while people are somewhere in the background, but they aren't an official audience? In college three friends and I would sit in a student lounge area--two of us played guitars and sang while other students, filtering through the area (it was between the cafeteria and the dorms) would stop and listen. By the time we were done for the evening, the lounge was full. But it happened gradually over a couple hours and never felt scary.
Start with your easiest or "funnest" song. Even a silly song that makes people laugh. The first song is the hardest. Once you get going, the nerves recede, just leaving the rush of performing, which is cool.
And, by the way, you are not likely to appear as nervous as you feel. Last spring I did three songs for a local variety show. I haven't been performing much at all the past few years, so I was definitely nervous. I prepared really, really well. And I talked between the songs. I find talking harder to do than singing, so that was even more scary. And I worried about forgetting words, so I had a music stand next to me, where I could see it easily. I put a 3-ring binder containing the lyrics and chords on it. I put the songs in REALLY big print, with the chorus in a different color, so it was easy to pick out where I was quickly. I looked at it a lot while performing.
When I was done, my husband --who knows me pretty well-- commented on how relaxed I was, mentioning he would have been nervous. And he didn't even notice I had the words there right in front of me. Well, a little off to one side.
If you make a mistake, keep going. Don't make a face. Don't hesitate. Don't do it over. Most people will never know it happened.
And, finally, I'll repeat Boydie's advice to SLOW DOWN! Both talking and singing/playing. When you're talking slow enough to be understood, if you're nervous, you'll feel like you're talking 'wayyyyyy tooooo slowwww. But you aren't.
Plus everything else Boydie said....
