Step 1: Materials
2 pieces of felt (you can get these at your local fabric store for only about .25 apiece)
Disappearing ink fabric marker (I got mine for about $5 at our fabric store)
Needle and thread
Piece of paper to sketch your monster on
Buttons or spare fabric to decorate your monster with
Some kind of cotton or polyester stuffing to fill your monster with
A sewing machine
Step 2: Outline your monster
Pin the two pieces of felt together, and trace your monster outline on one side of the felt pieces with the disappearing marker.
Step 3: Start sewing!
When you sew, I've found that it's best to get the intricate parts out of the way first (this comes in handy later when you want to sew on features and stuff it).
On this monster, starting off, I've just sewed together his left side.
This way I can sew on his eyes and things with plenty of room for my hands to work.
Once you get one side sewed you can go ahead and cut off the excess material on that side. Be careful not to cut away anything you haven't sewed together yet. Leaving spare material on the outline gives you room for error (which admittedly, I need), and it is easier to control when putting through the machine.