This project is a great yarn stash buster! You are not limited to yarn, experiment with crochet thread, thin leather cord or even thin wire. The possibilities are endless. For several other variations including how to add beads, please check this post on The Beading Gem's Journal.
Step 1: Materials
Measure your wrist and cut the chain to the right length after allowing for ease (about 3/4") and the addition of jump rings and a clasp.
You will also need a large hole needle like a tapestry needle for weaving in the ends.
Make a starting slip knot and hook the loop up. If you are new to crochet, check out the first 3 steps shown here.