How to do it
Pegboard is available in 2-by-4-foot, 4-by-8-foot, and 4-by-4-foot pieces. Buy as much as you need, cutting it, if necessary, to size. With pine 1-by-2s, build a perimeter frame of identical dimensions. Mount the frame by screwing it into the wall. (If you are mounting the frame on drywall, you will need to use plastic anchors in conjunction with screws.)
Using a screw gun, 3/4-inch wood screws, and appropriately sized washers, mount the pegboard on frame, aligning outer edges and spacing the screws at equal intervals. (If you do not have a screw gun, drill a pilot hole first, then insert the screws with a screwdriver.)
Paint the pegboard in a color to match the rest of the room, and add hooks and holders for hanging tools.