This is a lovely versatile style that can be made in various sizes and used for various purposes. It is designed to fit comfortably over an arm -- thus the yarn bag versions that have been used for knitters whilst walking. I have also made it as a peg bag, as it also suits this purpose well.
I originally sourced a free pattern from Lorelei Jayne's "Yarn Bag Tutorial", which can be accessed here: Yarn Bag
But then I decided to support Apple Green Cottage by purchasing their reasonably priced ALLina Tote Bag PDF Pattern, with much clearer instructions and two sizes to choose from, and it can be sourced here: Apple Green Cottage Tote Bag
This is my version of the smaller pattern, made into a bag to hold my embroidery cottons.
Finally, I drafted a pattern from http://masteraiumniki.blogspot.com/2018/08/blog-post_98.html , choosing the version with the wider handle for my peg bags.
This is how I sewed them together:
Cut out the outer and lining pieces and applique "Pegs" onto the front piece.
Sew the seams across the top of the handle on both the outside and lining pieces (I found this easier than the complicated instructions in the bought pattern, but my way may not work with a narrower handle).
With right sides together join and sew the outer and lining pieces around the sides of the handle.
Clip the curves and turn right side out.
Now join the side seams of the outer bag to the outer bag, and the lining to the lining. Sew across the bottoms of the outer piece and the lining, but leave a gap in the lining for turning.
Now box the bottom corners by pulling the side and bottom seams together and sewing across the gap.
Here is a closer view of the finished seam.
And here is a view of the side and bottom seams coming together before pinning and sewing.
Now turn the bag right side out through the gap in the lining. It will look like this. Sew the gap in the lining closed.
And finally pull the right side out through one of the side seams on the handle. I then chose to top stitch, close to the edge, around the handle openings to finish off.
Some other colourways.
A design feature after I accidentally cut this one along the fold line.
And yet another colourway -- this one had a bright pink lining.
This is the bag I made first with this pattern, and it is now my sewing notions bag.
Remember: If you believe it will work out, you'll see opportunities. If you believe it won't, you'll see obstacles. Wayne Dyer