Any backpack or bag can be used as a pannier for your bike. By adding something to keep the back pack out of the spokes and securing the straps to keep them out of the spokes you can save money and use something you already have. Also most panniers are not good back packs so it is nice if you are riding to take a hike to have a good backpack.
Step 1: Tube to Keep Pack out of Spokes
I used an aluminum tube that is secured with hose clamps to my frame and rack of the bike. To protect the finish of your bike first wrap the frame with strips of used bike inner tube. Notice how the tube goes behind the frame and in front of the rack, this helped bow the tube away from the wheel.
A variety of different things can be used keep your pack out of the spokes. To test if it is going to work press it toward the wheel and see if it hits the tire easily. I have also used bamboo, however the bamboo eventually cracked and it was more work because I had to tie it together behind the tire adding more points to get loose.
Broken bike racks, rims and tent poles are all good materials to tie to your bike. Check your local metal salvage yard to see if what you need is there.