Step 1: Determine How Big a Piece of Fabric You'll Need
First, measure the box, both around the sides (S), and around from top to bottom (T). Write those measurements down. The measurements don't have to be really precise. You can round up to the next inch, and it won't affect much. You're going to need some ease anyway.
Now for the math. The fabric will wrap around the bottom, and you'll be making two side seams.
First the width. Now since you need two side seams (to have ribbons to pull to both sides, you'll take the S measurement and cut it in half (S/2), then add seams plus a little ease, so that you can get the box into the bag. I tend to be generous, so (S/2) + 2" for the width.
Next the length. Start with the T measurement. You'll also need about two times the size of what ever ribbon you'll be using as ties. I used 1/4" ribbon I had sitting around, but I don't like to go less than 1" on the drawstring, for looks and usability, so I added 2" on both edges (+2" x 2). Plus twice a nice ruffle on the top. The bigger the box, the bigger the ruffle needs to be to look good. I thought a 4" ruffle would look good (+4" x 2) And, you'll need that ease as well, plus some to finish the edge...about 2" again. So T + (2 x ribbon width)+(2 x ruffle height)+2"(ease+top edge finish).
As you can barely make out in the picture above, my box was 31" around (S) by 23" top to bottom (T). So my formula was (31" / 2) + 2" = 17.5" for the width, and 23" + (2 x 1") + (2 x 4") + 2" = 23.5" for the length. So I needed a piece of fabric that was 17.5" x 23.5".
To check, you can lay out the fabric, and fold the fabric around it, to make sure you haven't missed any thing. I found a piece that was a bit bigger in both directions, and just used that.
Step 2: Cut the Fabric.
Step 3: Sew the Basic Bag.
Step 4: Finish Top Edge.
Step 5: Pin the Casing.
Mark it if you want to, or just pin as you go. I placed my pins near the folded edge. Make sure you only pin through two layers of fabric, not four! I just lifted the fabric to either side of my ruler, and pinned it. Like I said, I kind of wing it. If you're making a wide bag, slide the ruler down, and repeat as necessary.
Flip it over, and do the same thing to the other side.
Then flatten the sides, so you can pin the side seam. Now the only tricky part here is the side seam. You want to try and make sure that the seam doesn't twist...and mine ALWAYS want to. So open up the cuff till you can see the seam and make sure it's not twisted before pinning it.
Step 6: Sew First Casing Seam.
You want to reinforce stitch across the side seam, so when you sew past it, reverse back across it, and then continue sewing. Or if you forget (like I kept doing), just go back and sew over it again. Trim all your threads when you get done.
So now you have a bag with a nice finished top edge, and a flange in the middle.
Step 7: Sew Down the Casing.
Step 8: Measure and Mark to Square Up the Bottom.
First you want to start with the corner between your bottom seam and side seam. Turn the bag inside out, and flatten the corner so that the bottom and side seams are touching. Do the same for the other side, and lay it out so that the bottom seam is up.
I know there are better explanations of how to fold it, but you can see how the corner is folded so that bottom seam is running across the middle of the folded corner. It will look kind of like dog ears.
After you have the bag folded and laid out (the top of the bag gets folded out to the side out of the way), and you've gotten your box on there, move the box out toward the corner until both box corners almost, but don't quite touch the folded edge of the fabric. Draw a line along the box, across the corner dog ear. That's your stitching line. If you stitch there, the box bottom will fit nicely into the bottom of the bag with a little ease. Pin if you like.
Move the box and repeat on the other corner of the bag. Now if you move the box into the center, you can make sure that your bag won't try to squeeze your box.
Step 9: Sew to Square Off the Bottom.
Step 10: Drink a Glass of Wine (or Your Favorite Adult Beverage).
Step 11: Cut the Stitching at the Seam in the Casing.
From the front, using a seam ripper, or a pair of small embroidery scissors, clip the seam in the casing, so that you'll be able to slide your ribbon through it.
Do the same for the other side seam of the bag.
Step 12: Cut Your Ribbon to Length.
Ok, Ok, Measure the width of bag, and multiple x two. Add length of ribbon tail x two. Six inches is always a good minimum. (width x 2) + (6" x 2). Happy?
Cut two this length.
Step 13: Thread Ribbon Through the Casing.
Thread one of the ribbons so the ends hang out one side. Thread the other ribbon so the ends hang out the other side.
Tie the ends of the ribbon into knots so they won't easily pull back through the casing. Or you could tie little beads or jingle balls on the ends if you like.
Step 14: Wrap Your Box!
Now go finish that wine.
One of the other great things about this bag, is you can make them to fit odd sized presents...especially if you're in a hurry and you don't have a box to fit it! You work the same method, just measuring around the largest part of the odd size present, and then again around the tallest part.