Get a cap from a jar or can. I used this cap from a baking soda can.
Place your cap on the centre of the fabric and draw a circle around it roughly two inches away.
Cut out the fabric. Don't worry about being neat!
Use a needle & thread to stitch through the edge in one line all the way to the other side.
Once you've stitched your way through the entire circle you will end up with a pouch like so. Get some stuffing from an old pillow and fill the pouch in to your preferred size.
Once you've filled your pouch with stuffing, tighten and secure the pouch. Make sure to stitch over the ends as much as you can if you want this to be durable.
Apply glue to the hallow side of the cap and attach it to the pouch on the closed end.
Now take another small piece of fabric, apply glue all over it and attach a nice hair tie or rubber band to the center.
Now attach that to the center of the empty side of the cap and let it dry for a few hours.
TAADAA! You just made your self an adorable yet handy pin cushion. let me know if you have any questions. Enjoy :D