Step 4: Gather the circle
When you've stitched all the way around the circle, make sure your needle exits the fabric on the 'right' side. Fudge your stitches slightly if you need to.
Pull the thread until the circle starts to gather up. Place one or two washers inside at this point. then continue to pull the thread until the fabric is gathered up, completely covering the washers.
There will be a small hole left in the center.