This method is easy and cheap, yet results a very pleasent result.
Step 1: The transfers
Also you will have to buy some 'T-Shirt Transfers' sheets sold in many stores, including your local printer shop. Often the 'T-Shirt Transfers' sheets will only allow you to use them on white T-Shirts, but it is possible to buy them for darker colors.
I found these at 3-4$ per sheet, but I live in a country where everything is expensive, so you might be ble to find them at a much lower cost.