Little project bag

I have quite a bit to post about but I want to start with this:

I made this little project bag in about 45 minutes total while playing with the kids!  What started as a rectangle scrap of knit fabric and a piece of ribbon turned into the perfect little project bag for my yarny creations!  Empty and balled up it fits in the palms of my hands but as pictured it holds one skein of yarn (one of the long Red Heart ones!) and a half created little valentine project.  The trick to the bag's grow-ability is that it's gathered on the sides and on the top.  So the only seams are to finish the raw edges while making the chanel for the ribbon.  After I took this picture I opened the bag up a little to see what else it could do.  The handles shortened and the sides draped open a little more giving it a totally different look, like a little handbag.
If I had taken pictures during the process I would post them here with a description of how to make it (since it is so simple!), but I didn't know it would turn out so cute.  Just e-mail me or comment if you would like instructions.