I have been knitting predominantly with wool and alpaca yarns lately. It occurred to me that I do not have to throw away all those little scraps of yarn because they will felt. So, I started collecting a pile of loose yarn scraps to make into little felt balls. They can become beads, cat toys, buttons, or whatever you like.
Step 2: Make the balls
Wad-up the scraps of yarn, reserving a few longer strands. Wet the wad down in very warm water, squeezing out some of the water. Use the reserved longer strands of yarn to help firm up and gently bind the ball together.
Pour a little liquid dish soap on your palms and gently begin to rub and roll the ball around in your palms. Keep rinsing the ball under hot and cold water and adding soap as needed.
As the ball begins to shrink and get firmer, use a little more pressure as you roll it around in your palms.