Step 1: I love using a compass for my circles. I just have a cheap one from Walmart. I set the compass to 1 1/4" (zoom on picture for close up). This will make a 2 1/2" circle. This circle will form a yo-yo approximately 1" - 1 1/4". Draw the circle onto paper and cut it out.
Step 2: Cut the circles out of fabric.
Above: Step 3: Fold the edge down 1/4" (I do this as I am making the running stitch) and make a running stitch around the circle. **Make sure the thread that you are using is strong. Dental floss is great, but it only comes in one color: white. I love to use embroidery floss. You can use two or three strands and of course it comes in 1000s of colors (well...maybe hundreds, but still that's a lot!).
Above: Make sure you leave the tail hanging when you start the running stitch and do not tie the tails together when you finish.
Above: Step 4: Now draw up the tails and tie. Hint: I have found that the closer you get the running stitch to the edge the smaller and more uniformed the gather will be. See in the above picture how the gather is kind of bunchy and not very neat looking. I made the running stitch between 1/8"- 1/4" from the edge. This look is cute, but not what I was going for. In the "above, above" picture of the running stitch (blue circle) I made the stitches really close to the edge.
Above: Here's the difference in stitch placement. One on left (orange) stitch was placed approximately 1/4" from edge and on the right (blue) it was placed almost to the edge.
Above: Happy Little Yo-Yos! I love using them on clothespins. Fun!!
Hope you have a wonderful Labor Day Weekend and don't forget to keep those ten little fingers busy!!