Loot bags are awesome because they'll be used instantly by everyone (give them at the beginning of the gift-giving and they can stash all their booty straight into their own personalized bag), can be reused year after year (store them in your Christmas stockings?), and can even double as attractive reusable gift wrap.
Each bag takes approximately a half yard of fabric, a little bit of string, and some colored thread.
Step 1: Project Materials
Half a yard of 45" wide fabric
Thread for sewing and for monogram
Small piece of contrasting fabric (about 4"x4") - contrasts with thread for monogram
Piece of cotton yarn, or other for drawstring
Step 2: Make Monogram Patch
Take 4" piece of contrasting fabric.
Write letter on fabric lightly with pencil.
Set your sewing machine to a zigzag stitch with a very narrow stitch setting (like the one for buttonholes).
Using thread that contrasts with fabric and using the zigzag stitch, follow the lines that you drew on the fabric with the pencil. You will probably have to slow the sewing machine way down for curves.
Making the Patch
Fold each side of the patch over about 1/2" from the side and iron down.
Repeat for any additional loot bags and set monogram patches aside.
Step 3: Sew Loot Bags
Take your half yard of fabric and fold (right sides together), leaving selvedge edges at the top of the bag.
Selvedge edge=the part of the fabric that is a finished edge, that isn't cut.
If you have a long piece of fabric, the easiest way to make the bag is to fold the fabric this way and then cut pieces every 18" or so (you can eyeball it).
You can pin them together if you like, or if the fabric is pretty flat, skip the pinning.
Prepare all the pieces you intend to make into a bag so you can assembly line sew them.
(Note: If you don't have enough fabric to fold like this, just cut two like-sized pieces and put them right sides together)
Sewing the Bag
To assembly line sew, sew up one side of bag (put the fold side in first to avoid weird puckers along the bottom of the bag). If you have multiple bags, feed them in after the first bag, without cutting thread. Sew up all of the bags, one side only.
When finished with one side, turn the line of bags over and sew down the other side, assembly line style. (It might be easier to cut them apart before you do this)
(Note: if you have the two like-sized pieces, instead of doing one side at a time, you'll want to just sew all the way around three sides of the bag, leaving the top unsewn. You can assembly line this too.)
Step 4: Make Drawstring Casing
Fold top (selvedge edge) of bag over (fold over on inside/wrong side of bag) about 1" or so.
Pin in place with a few pins (you'll save more time pinning than trying to keep the casing straight by hand).
Starting at one seamed side, Sew around about 1/4" from the selvedge edge, leaving about 3/4" for the drawstring casing. Sew nearly all the way around the bag, leaving a 1" gap between the end of the seam and the beginning. This is where you will be threading the drawstring through.
(Note: if you used the cut pieces of fabric, you might want to fold top over about 1/2", iron, and then fold again to create a finished edge for the casing.)
Step 5: Finishing the Bag
Turn bag right-side out.
Pin prepared monogram patch onto front center of bag, about 1" beneath casing (don't sew it over the casing!)
Topstitch around four sides of the patch. (I did two rows of topstitching, but that's not necessary).
Tie your cotton yarn to a safety pin securely. Thread into 1" gap you left in the casing, and thread all the way around, and out the other side of the gap.
Tie drawstring ends together, trim, and you're done!