The gauge for this pattern doesn’t much matter, but you want a relatively thin yarn. Sock yarn is perfect. Anything from fingering to sports weight will work. You need about 2 ounces and a set of 4 dpns in a size appropriate for your yarn.
Cast 3 stitches onto 3 needles, 1 stitch onto each needle.
Rnd 1: K (3 stitches)
K each rnd until piece measures 4” from start, more or less.
Next Rnd: K2 tog around (48 stitches)
Cast off 28 stitches (20 remaining)
If you want the flap of the bag to be a different color than the body, switch yarns now. Work back and forth in stockinette stitch for 4 rows.
Decrease section (start on K rows)
Row 1: K1, Slip 1, PSSO K to last 3 sts, K2Tog K1
Next row: K7, K2Tog, K4
Resume decrease pattern until 2 stitches remain. Cast off.
I-Cord handle. Cast 4 stitches onto 1 dpn.
Repeat row 1 until cord is desired length. I use 6” for a small handle.
Sew handle on bag. Weave in ends.