First of all, I feel terrible. I have no real pictures. But I have a good excuse! My needle broke on my machine, and it was my last one. I haven't gotten to buying new ones yet. So I just had to settle with cartoons.
Cut your fabric to the desired size + 1/4 inch on each side for sewing room, and 1 inch extra on the top. If you are using a lining, make sure you cut this at this time, too. Cut 2 of each.
Sew the lining and fabric together, but only on the bottom so it's not to bulky.
Fold over the top of the now 2 peices of fabric and sew so there is a hole on the top that you can easily feed yarn/ribbon through.
Sew the 2 peices of fabric together inside out.
(sorry, this image isn't too good.)
Flip inside out and thread yarn/ribbon in and tie it! Then, slide it so the tied part is inside the bag and it looks like one long continuous rope.