These instructions could be used for making a flag from horizontal blinds as well; you would just need to adjust your layout accordingly.
Total cost for this project? About $30, depending on how much paint you go through. (Of course, this doesn't take into the consideration the money spent on blinds if you had to purchase them.)
Alright...enough with the jibber jabber, let's get started!
Step 1: Ingredients
1 set vertical blinds (the kind you use over a sliding glass door)*
2 cans Dover White Krylon Fusion for Plastic spray paint
2 cans Red Pepper Krylon Fusion for Plastic spray paint
2 cans Patriotic Blue Krylon Fusion for Plastic spray paint
1 roll blue painters tape
1 pair heavy scissors
1 roll double-sided tape
*While you must use the plastic kind of blinds (vs. fabric), you can pretty much use whatever color you want. That being said, it's much easier to start with a light color so that you'll only need to cover it with a coat or two of paint.
If you don't have a set of vertical blinds hanging around the house, you'll need to hunt them down elsewhere (or buy them, but where's the fun in that?!?). I got mine from Freecycle. It's amazing what you can get on Freecycle. And sometimes scary.