Step 1: What You Will Need
If you want to make your bag smaller than the pillowcase you will need:
A Sewing Needle
Step 2: Making the Bag Smaller
At the closed end of your pillowcase cut how short you want your bag to be. Turn the pillowcase inside out and sew a running stitch through the two layers of the area pillowcase you cut. The stitch should be from one side to the other. Turn the pillowcase right-side out and your stitches will not appear.
Step 3: Cutting the slits
Step 4: Adding the hole
Step 5: Threading the Rope Through
See pictures for more clarification.