If you are using a curved cup (like from Starbucks) then you need a curved cozy. Use the brown paper cozy from a Starbucks cup for the pattern (shortened it a bit though so you have room for the laces). If you use a straight mug, then you need a straight cozy. Just measure around the straight mug and make it as tall as your hand. Tape your pattern around your mug to be sure it fits smoothly but is a bit short to go all the way around.

Using your patten, cut two pieces from your fabric and one from your batting.

Pin the two fabrics together right sides together with the batting on the outside (against one of the wrong sides of the fabric pieces). Sew around three edges (leave a short end open) with a 1/4" seam.

Trim excess bulk and the corners. Turn right side out; press. Pin the raw ends under and sew shut as well as quilt randomly all over.

Space the eyelets evenly apart on each end about 1/2" inside the fabric's edge. Four on each end. Do one end then flip the end to match the other and mark where the first set of eyelets are (to ensure placement accuracy). Thread with ribbon like a shoelace. Walla! You should probably also treat the ends of the ribbon with something like fraycheck to stop it from fraying.