My dear friend Tracy's been called to bless some dear Ugandan children by making Colored Pencil Rolls. Her goal is 500 by November 30. You can find out more wetoatmealkisses.com .
You will need: 1 large button, 1 thin no damage elastic (ponytail holder), 2 pieces of cotton fabric 18" x 12", and a piece of flannel (or interfacing) 13.5" x 12".
Measure 9" up the side to place elastic. You can put a pin through all the layers of fabric in the space between the elastic (the "hole"). If you click on the next picture, you might be able to see the elastic sticking out of the side. When you sew around the outside with 1/2 in seam allowance, you will catch the elastic. You might need to hold it as you feed it through the machine. If you'd like, you can backstitch it for added strength, though I don't know that it's necessary as you stitch it once more when you topstitch. 
Pin right side of outside fabric to right side of inside fabric, then the flannel on top of the outside fabric.
Measure in 1.25" and down 5", cut from point to point. Then stitch around the with 1/2 inch seam allowance, pivoting at corners and leaving a 3-4 inch opening to turn.
Trim all 6 corners.
Turn. Making sure to pull out the corners to make nice points. Press. Topstitch close to the edge around the whole thing sewing over your beginning stitches 1/2-1" (this is called trace stitching and is prettier than backstitching.)
Fold down angled edge 5 inches. Press and topstitch close to edge (1/8 in) to define the flap.
Fold bottom up 4 inches. Press. Pin matching edges. Topstitch (over your previous topstitching) the sides to create a pocket. Mark the middle. Then mark every 7/8" either way, to divid into 12 pockets. Stitch the marked lines, making sure to backstitch at each end.
Place the pencils in the roll and roll it up to mark the button placement, and sew on the button. 
Feel free to ask any questions, and I will do my best to answer them.
