Step 1: Parts Layout
Step 2: Cut head-hole (and cap!)
The garbagebag-raincoats i have seen in the past put the head hole in the middle of the bottom of the bag, and this works for many situations. Though, when I'm caught by a sudden rainstorm, I'm less worried about myself and more worried about my expensive textbooks, laptops, etc.
Find a corner of the garbagebag on the side with no opening. Cut out a triangle for your head to go through. Keep the triangle, it will also be your cap.
Step 3: Arm Holes
Now, take the bag off and cut holes for arms.
All the works done, now go play in the rain!