Step 1: Make Lots of I-cord
Then spend a few evenings watching good old films and knitting a loooooooooong I-cord.
If you don't know what I-cord is, look here http://www.purlbee.com/i-cord-tutorial/, or just about anywhere. Don't be scared if you've never touched knitting needles before; it is very easy
Step 2: Start Sewing
Start going up, and when you meet the handle turn 180 and go back wards. Make one of your turns a bit longer to go through the handle, so it can become a buttonhole. Hold everything in place as you proceed with little 'invisible' stitches with an ordinary sewing needle and thread.
It was long to write, but actually the photos are quite self-explanatory.
Step 3: Sew the Button On
1) Choose a nice-looking button
2) Sew it on.