Ever since I've been knitting, I've wanted to make a felted purse. I found this pattern recently, (accessible if you join Knitting Daily), and kept it in mind. I bought my yarn at Hobby Lobby.
Here's the bag all knitted up, pre-felting:
As you can see, it did shrink, but not too much. The handle could be longer, but oh well. Now I need to find a perfect button and I'm all set. Overall, I was pleased with the pattern, though it says "beginner" but doesn't really have "beginner" instructions.