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So, my family is a little weird, and has gotten quite into local fun runs (5K, 10K, marathons)- Of course there is always a Holiday Fun run- and who wouldn't want to get dressed up for it. 

I looked all over for a nice Elf costume for my kids to wear- and the cheapest I could find was $25- for a one day wear-- way too much.

Here's what I was able to make for just $5.

Supplies:
1 yd Green Felt ($2.49/yd)
1/4 yd Red Felt ($2.49/yd)
Green/Red striped socks ($1 at dollar store)
Elf hat ($0.99)

Step 1: Determining the Width

Making the costume is really very simple- 

1. Lay the felt out flat with the fold (from the bolt of fabric) on top. This portion will become the shoulders of the costume.
2. Using a sweatshirt that fits your child- lay it out on the felt to determine the width required
3. Cut the felt one inch wider than the sweatshirt on each side

Step 2: Cutting Instructions

With the felt cut to the right width, now you need to make the cutouts for the arms, neck and bottom triangles.

4. The arm cutouts are a simple scallop cut from a point a few inches below their armpit to the shoulders. Start by cutting much less than you think you'll need cutoff, and revise after a test fit- you can always cut more- but it's difficult to add fabric back on.

5. Make a half round cut in the center of the top for your child's head. Don't make the curt too large or it will fit too loose. 
6. Attach the open sides together using a thick bead of hot glue or sewing machine (preferred)
7. Turn the costume in-side out so that the seam you just made is now hidden inside.
8. Last step of these piece is to cut triangles in the bottom 

Test fit everything so far- if you need to make more room for the arms/head- just cut a little more off and test fit again. When everything fits properly, then you can add the red triangles.

There are two ways to do the triangles- 
1) Make a big donut shaped cutout with the inner circle the size of the neck hole and the outer circle about 3inches wider. Once you have the donut, make zigzag cuts from the outside to a point about 1inch from the inner circle. Don't cut all the way to the inner circle, or you'll break the ring.  When all the cuts have been made, sew or glue this ring to the rest of the costume centering it on the neck hole.

2) Cut 10-15 small triangles about 2-3" on each side. Sew or glue each of the triangle end to end going around the neck hole. This will give the same appearance as the previous method, but will have much less fabric waste

Finally- all you need is to put on the socks and hat- and you've got an elf. For an undershirt my sons used long sleeve pajama shirts, but a sweatshirt or long T-shirt will work just as good.

Hope this works well for you.
Cool and cute :3

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