You can use virtually any size towel and ribbon you like (Martha uses a 16-by-28-inch terry-cloth hand towel and 2 1/2-inch-wide grosgrain ribbon). For the handle attachments, there are several options (Martha uses circular wooden rings); just be sure to remove the handles before washing the bag.
Tools and Materials
Preshrunk, washable ribbon
2 circular handbag handles
Hand-Towel Beach Bag How-To
1. Attach the Velcro to the towel: Machine-sew a 2-by-2-inch square of female Velcro to the center of each end of the towel. (Be sure to sew the Velcro to the side that has the label, which will be the inside of the bag.)
2. Attach the Velcro to the ribbon: Cut the ribbon to the appropriate length (for a hand-towel-size bag, cut 1 yard). Sew a 2-by-2-inch square of male Velcro to each end of ribbon. Fold over the ends of the ribbon, and fold over again, creating two folds. Hold the ribbon in place using a binder clip, and tuck the Velcro under the fold. (Folding the ribbon over protects it from fraying and creates a neater line.) Once the Velcro is secured in place, sew each side of the Velcro onto the ribbon.
3. Attach the ribbon to the towel: Pin the ribbon down the center of the towel, making sure the Velcro is on the underside. (There should be an even amount of ribbon hanging off each end of the towel, about 4 inches, which will be wrapped around the handles, attaching them to the bag.) Machine-sew the ribbon onto the towel.
4. Fold the towel in half so the two top ends meet and the ribbon is on the inside (the bag will be inside out at this point). Sew up the two sides, leaving a 1/2-inch allowance, and turn the bag right side out. Wrap the ribbon hanging off each side around each handle attachment, and attach the Velcro to the bag.