Over at the Craft Magazine blog, there is a wonderful illustrated tutorial on how to make a simple tassel using leftover yarn.
Tassels are lots of fun to make using a scrap of cardboard, leftover thread (at least 2 yards), and scissors. They make a wonderfully thrifty craft. Two things will make your tassels much better looking. The yarn should be in a continuous length, so try to use packages you haven’t cut. Also if you are going to use more than one tassel make sure you have enough thread or yarn for all.
The thread you choose has a huge effect on the final look of the tassel. Use a think thread or knitting yarn and you will get chunky, rough tassels. If you want something more delicate and smooth use a fine or pliable thread such as blending filament or floss.
You can also make really effective tassels by combining several threads in a similar color palette. You could even use an overdye to set the palette and use thread from your stash. I like these kinds of tassels when they are large and used singly.
Once you’ve made your tassels, what can you do with them? Four of them can decorate the corners of a pillow. Two look great hanging off the end of a mini-sock or stocking. You can use single ones to decorate anything that has a knob — they don’t need to be attached to needlepoint.