Step 1
First we need to create a new canvas with black background. The following settings are recommended:

Step 2
Create your type mask text using the Horizontal Type Mask tool as shown in the picture below:

Using the Horizontal Type Mask tool pick an area where you want your title to appear and type away.

Step 3
Using the Fill tool, fill the inside of your letters with white colour.

Step 4
Next pick the Smudge tool and smudge the edges of your text. For this pick a big brush area around 35cm diameter.

Step 5
Next step is to colourize your text. Bring up the Color Balance dialogue menu from the bottom right bar of your PS, and play around with the Shadows, the Midtones and Highlights as shown and hit OK. This will give you the burning effect.

Step 6
Moving on we will add some Gaussian Blur effect. Simply go to the Filter menu from the top toolbar, hit Blur and then Gaussian Blur and OK.

Step 7
To create the Neon effect you will need to duplicate your image and choose Linear Dodge on the copied layer. This will give the outline of your layer a neon like fluorescent look.

Step 8
Using the Horizontal Type Tool this time we will create another text layer to fill in the Neon fonts we created in the previous step. Choose the same font size and type the same word/words with your original text and overlay the new layer on top of your original one.

Step 9
Finally we will add the glow to our text. Double click on the layer of your Neon object and scroll down to “Outer Glow”. Change the glow color to a red glow. Your Burning Neon Effect is complete!