Knit an 8-by-11-inch rectangle in stockinette (knit one row, purl next; repeat).
Fold in half, right sides facing; sew sides together with yarn needle. Turn right side out; steam flat with iron.
Unzip zipper (use one that fits pouch opening), pin inside pouch, and hand-sew in place with sturdy thread.
For liner, cut 8-by-13-inch piece of thin cotton fabric. Fold down short ends 1 inch, wrong sides facing; iron to crease. Fold cloth in half, end to end, right sides facing; sew along sides using 1/4-inch seam allowance. Do not turn inside out.
Place liner in pouch; whipstitch folded ends to zipper tape directly under zipper's teeth. Add a tassel to zipper, if desired.
Knit 4-by-15-inch rectangle in stockinette. Fold in half, right sides facing; sew sides together with yarn needle. Turn right side out; steam- iron flat. Sew snap inside; add button.