This mini guitar is really fun to make and works pretty well! Good for decoration and if you're bored.

Step 1: Parts/Tools

Parts:
Stick (at least a 1/2 in. wide)
Elastic String
Guitar Pick (optional)
Tools:
Drill
Whittling Knife
Miter Box/Saw (if the stick is to long)

Step 2: Whittling the Wood

First, you need a whittling knife (I used a roughing knife). Then you need to get some wood (White Birch works great). Whittle all the bark off and near either end make a "flute hole" (below). To do that, you need to make a line with your knife, then cut down up to the line, cut on the line, cut down up to it, etc. Make the "flute hole" about half the width of the stick. Now you're ready for the drilling!

Step 3: Drilling

Now's the time for the drilling. Depending on how many strings you want, that's how many holes you make on both sides of the "flute hole" (I did three). Lace the elastic string through the holes any way you want (you need to experiment -- some ways don't work).
I took the two ends and tied them together so that when you pull them and strum, it's tightened and makes a better sound. Also, if you want something to hold the strings tight, you can attach a hook (I got lucky -- mine had the start of a branch to hook it on.