Don't get too eager to start cutting a shirt (all fabrics) into rags. Take a good look at what you've got on hand: buttons, button down pockets (on some shirts), placket-ed wrist bands with buttons, collars, etc.
1. Button down pockets of all sizes are wonderful for making your own tote-bags, mini totes, etc. Cut-out the pocket leaving about an inch around, to turn under, then sew it down onto the tote-bag or purse lining, using the same stitch lines. Any number of colours look great in Boho-chic style bags.
2. Sleeve cuffs - these placket-ed pieces of fabric make a great carry-all for Epi-pens, cells, and all small devices. Remove from the sleeve, leaving an extra inch for seams. Fold the cuff over so the buttons and button hole can be used. You can add a cord ( to enable it being worn like a necklace), add a hook (to clip it onto a back-pack, purse etc). Stitch along both sides to create a super-mini-tote. Even without a sewing machine, this can be created super quick by hand stitching.
3. Use the back of the shirts to cut into large 4, 5, or 6 inch blocks for making your own quilts.
4. Start at the front of the shirt on one side and cut into thin strips to use for crochet or knitting (think making a round area mat, etc.)
5. Attach the collar to a thicker knit tee, (a heavier weight fabric that can support flannel - autumn, winter). and stitch it on: good side of collar facing the inside of the shirt. Stitch along from one side to the other. Turn the collar back and up (seam-line will be hidden under the collar now) the good side facing out. Edge-stitch along the neckline to maintain the shape and create a nice finish.
6. Cut any leftover pieces of fabric into smaller bits to stuff a dog's or cat's bed, etc.
Think of all the mileage you can get from a single worn out shirt.
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