A knit lining gives the bag some structure and keeps it from stretching too much, and a loop sewed onto the bag makes the strap infinitely adjustable.

Knit a rectangular base in main color. Pick up stitches around the base and knit stripes in the round to desired length. Then continue knitting in the round in solid color for lining (I used lighter weight yarn so didn’t need to decrease to make the lining slightly narrower).

When lining is desired length, bind off approximately 2/3 of stitches to leave enough to knit a flap that will serve as the inside bottom of the bag. Stitch around the short sides and one long side of the inside bottom rectangle.

Cast on twice as many stitches as you need for width of the strap and double knit the strap to desired length. Sew one end of the strap to the top of the bag. Knit a rectangle six inches or so long and about the same width as the strap to serve as a loop to tie the other end of the strap. Sew rectangle to top of bag, pull strap through the loop, adjust length and tie off adjustable strap.