Felted Coin Purse – Free Knitting Pattern

There is something quietly satisfying about a project that teaches you two things at once. When you knit a coin purse and then felt it, you get a master class in texture transformation — you start with loose, drapey fabric and end up with a dense, sturdy little pouch that feels like it could last for decades. This free knitting pattern walks you through every step of making your own felted coin purse, from casting on to the final snap or zipper. Whether you are a seasoned knitter looking for a quick weekend project or a curious beginner eager to try wet felting for the first time, this pattern has something to offer you.

Let’s start at the beginning.

What Is a Felted Coin Purse and Why Knit One?

A felted coin purse is exactly what it sounds like — a small pouch, knitted in wool, that is then run through hot water to cause the fibers to mat together and shrink. The result is a fabric that is thick, firm, and surprisingly water-resistant. Unlike regular knitted fabric, felted wool holds its shape beautifully, doesn’t fray when cut, and has a lovely matte texture that looks almost handmade in the most artisan sense of the word.

The appeal of making your own rather than buying one is multifold. Handmade felted purses have a character and warmth that mass-produced items simply cannot replicate. You choose the color, you control the size, and you can customize the closure, the shape, and any embellishments to match your taste or to create a personalized gift. A felted coin purse also makes one of the most universally appreciated handmade gifts — practical, beautiful, and small enough that the recipient doesn’t have to find shelf space for it.

From a knitting perspective, this project is genuinely forgiving. Because the fabric is going to be felted, your tension doesn’t have to be perfect. Slight inconsistencies in gauge disappear completely in the washing machine. That makes this an ideal confidence-builder for newer knitters and a pleasant, low-stakes project for more experienced ones.

Materials You Will Need

Before you cast on a single stitch, gather your supplies. Having everything ready before you begin makes the whole process smoother and more enjoyable.

Yarn: You need 100% wool yarn, and this is the one detail you absolutely cannot ignore. Superwash wool will not felt — the superwash treatment coats the scales on each fiber so that they cannot interlock. Look for yarn labeled simply as “100% wool” without any superwash designation. Feltable yarns include brands like Cascade 220, Lion Brand Fishermen’s Wool, Patons Classic Wool, and many others. You will need approximately 100 to 150 yards for a standard coin purse.

Needles: Use needles two to three sizes larger than what the yarn label recommends. If the yarn suggests US size 7, use US size 9 or 10. Felting works best when you start with a looser fabric. You can use straight needles or double-pointed needles depending on your preferred construction method.

Notions: A yarn needle for weaving in ends, scissors, a zipper (7 inches works well for most coin purses) or a snap closure, and a sewing needle with thread to sew in the closure. Optionally, you can add a key ring or a decorative button.

For Felting: A washing machine, a small amount of laundry detergent, a lingerie bag or zippered pillowcase, and an old pair of jeans or a tennis ball to help agitate the fabric. You will also need a blocking mat or a clean towel and pins for shaping.

Understanding Gauge (And Why It Matters Less Here)

Normally, knitting patterns live and die by gauge. A sweater with the wrong gauge turns into something that fits a different person than intended. With a felted project, gauge still matters in a general sense — you want to make sure your fabric is not too tightly knit, because the fibers need room to move and mat together during the felting process. But the exact stitch count is not sacred.

As a rough guide, aim for about 3.5 to 4 stitches per inch on your chosen needles before felting. After felting, the fabric will shrink significantly — typically 20 to 30 percent in length and width, though this varies depending on your yarn, water temperature, and agitation time. This is why the pre-felted purse is knitted considerably larger than the finished dimensions you want.

If you are doing this for the first time, it is worth knitting a small swatch and felting it before committing to the full project. Knit a four-inch square and run it through the washing machine. This gives you a concrete sense of how much your specific yarn will shrink and helps you calibrate your expectations.

The Pattern: Knitting the Coin Purse

This pattern creates a simple rectangular pouch that is approximately 5 inches wide and 3.5 inches tall after felting. It is knitted flat and seamed at the bottom and sides.

Finished dimensions (after felting): Approximately 5 inches wide by 3.5 inches tall. Pre-felting, you will be working with a piece roughly 8 inches wide by 6 inches tall.

Yarn: 100% feltable wool, worsted weight, approximately 100 to 130 yards.

Needles: US size 10 (6mm) straight needles.

Abbreviations:
CO = Cast On, K = Knit, P = Purl, BO = Bind Off, RS = Right Side, WS = Wrong Side.

Instructions

Cast on 40 stitches using a long-tail cast on or any cast on you prefer.

Row 1 (RS): Knit across all 40 stitches.

Row 2 (WS): Purl across all 40 stitches.

Repeat Rows 1 and 2 in stockinette stitch until your piece measures approximately 12 inches from the cast-on edge. This might feel like a lot, but remember that the piece will lose nearly half its length in some cases, depending on your yarn.

Bind off all stitches loosely. A loose bind-off is important — if your bind-off row is tight, it can create a rigid line that is visible even after felting.

Weave in your ends securely. During the felting process, the agitation is vigorous, and poorly woven ends can work their way loose. Give each end at least a few inches of travel through the fabric and double back if possible.

Shaping and Seaming

Fold your knitted piece in half widthwise so that the cast-on edge meets the bind-off edge. The fold becomes the bottom of your purse. Using a yarn needle and a length of the same yarn, seam the two side edges together using mattress stitch or a simple whip stitch. Both will felt nicely and disappear into the fabric.

At this stage you have a small rectangular bag, open at the top, with the fold at the bottom. This is exactly what you want before felting.

Optional: Adding a Gusset

If you prefer a coin purse with a little more depth — something that can hold more coins or small items — you can add a simple gusset. After seaming the sides, pinch each bottom corner so that the side seam aligns with the bottom fold, forming a small triangle. Stitch across this triangle about half an inch from the point. This is the same technique used to box the corners of a tote bag. After felting, these corners give the purse a flat, stable base.

How to Felt Your Knitted Purse

This is where the magic happens. The felting process is genuinely exciting, especially the first time you do it, because you can watch your loose-looking fabric transform into something completely different.

Step one: Place your purse in a lingerie bag or zippered pillowcase. This contains any loose fibers and protects your washing machine drain.

Step two: Add your agitator. Toss in an old pair of jeans or a tennis ball. The agitation from these items is what causes the wool fibers to lock together. Without something to agitate against, the felting process takes much longer and the results are uneven.

Step three: Set your washing machine to the hottest water temperature on the smallest load setting. Add a very small amount of laundry detergent — about a teaspoon is plenty. Too much detergent can actually inhibit felting.

Step four: Start the machine, but don’t walk away. Check on your purse every five minutes or so. Pull it out, look at it, feel it. You are looking for the stitches to become indistinguishable — when you can no longer see the individual loops and the fabric feels firm and slightly stiff, you are close. Most purses take one full wash cycle, but some yarns need a second cycle or part of one.

Step five: Do not let the machine run through the rinse and spin cycle. Pull the purse out before the cold rinse. Cold water after hot can cause uneven shrinkage and is harder to control. Rinse your purse by hand in hot water if needed.

Step six: Shape while wet. This is the most important moment. Wet felted wool is very malleable — you can stretch it, smooth it, and coax it into exactly the shape you want. Use your hands to shape the purse, making the sides even and the opening flat and straight. If you have a blocking mat and pins, pin the purse to your desired dimensions and let it dry fully.

Full drying usually takes 24 to 48 hours depending on humidity and airflow. Do not rush the drying with a clothes dryer — the additional heat and tumbling can cause further uneven shrinkage.

Adding the Closure

Once your purse is completely dry, it is time to add the closure. This is the finishing touch that makes it functional.

Zipper: A 7-inch zipper works well for most felted coin purses of this size. Trim it if needed. Position the zipper inside the opening of the purse, centered so that the zipper pull extends slightly beyond the edge. Using a sewing needle and matching thread, sew the zipper in place with a simple whip stitch or a backstitch. Felted fabric is thick and easy to sew through, and it doesn’t fray, so you don’t need to worry about finishing the edges.

Snap closure: If you prefer a snap, simply fold the opening flat and mark the center on both the front and back. Install your snap according to the manufacturer’s directions. Snaps are even faster to attach than zippers and give the purse a clean, simple look.

Button and loop: For a more decorative closure, you can sew a button to the front flap and create a small loop of yarn or cord at the back. The button closure is charming and works especially well if you have added an embellishment button on the outside.

Embellishments and Customization

One of the great pleasures of making something by hand is the freedom to make it entirely your own. Here are some ways to personalize your felted coin purse.

You can felt decorative shapes separately — flowers, leaves, simple geometric shapes — and sew or felt them onto the surface of the purse. Pre-cut felt shapes, wet, and press them onto the damp purse before drying. They will bond to the surface as everything dries together.

Embroidery is another wonderful option. Because felted fabric is so dense and stable, it takes embroidery beautifully. Use wool embroidery thread or even leftover yarn to stitch simple flowers, initials, or abstract designs onto the front panel.

You can also experiment with color. Stripes are easy to achieve — simply change yarn colors every few rows. Because the fabric felts evenly, your color changes will be clean and defined. Fair Isle or intarsia colorwork in a small purse is an ambitious but rewarding choice, and the felting process gives colorwork a lovely, slightly blended quality where the colors meld at their edges.

If you want to use up scraps of different feltable wools, you can create a patchwork effect by sewing small squares of separately felted fabric together. Each square can be a different color, and the seams between them can be embellished with embroidery stitches.

Troubleshooting Common Felting Problems

Even with careful preparation, felting sometimes produces unexpected results. Here are the issues knitters run into most often and how to handle them.

If your purse didn’t shrink enough, simply run it through the washing machine again. Felting is cumulative — each cycle shrinks the fabric a little more. The key is to check frequently so you don’t overfelt.

If your purse shrank unevenly, this usually happens because the fabric didn’t move freely enough in the machine. Make sure the lingerie bag isn’t overpacked and that you have an agitator item in with it. You can sometimes correct mild unevenness by pulling the damp purse firmly into shape and pinning it to block.

If your purse shrank too much, there is no way to reverse the process — felting is not reversible once completed. This is why the swatch step is so valuable the first time you work with a new yarn. That said, a smaller-than-intended purse is still a useful and beautiful object. You can also deliberately use a very small purse as a jewelry pouch, a medicine holder for travel, or a small gift bag.

If your yarn didn’t felt at all, it is very likely a superwash wool or a wool blend that contains too much synthetic fiber. Check the label again, and if in doubt, test a small swatch before starting over.

Gifting and Practical Uses

A felted coin purse is genuinely one of the most practical handmade gifts you can give. It keeps loose change from rattling around in a bag, corrals earbuds or lip balm in a purse, holds medication for travel, or serves as a small jewelry pouch. Because they are so quick to knit — the knitting itself takes most people two to three hours — you can make several in an evening and have a ready supply of thoughtful gifts on hand.

They are particularly lovely as stocking stuffers, party favors for a crafty crowd, or as packaging for a piece of jewelry. If you are giving jewelry as a gift, tuck it inside a handmade felted purse instead of a box, and suddenly you have given two gifts in one.

For children, a small felted coin purse is a wonderful first wallet — durable enough to survive rough handling, cheerful in bright colors, and with the added meaning of being made by someone who loves them.

A Final Note on the Joy of This Project

Knitting and felting a coin purse is one of those projects that reminds you why you started knitting in the first place. It is fast enough to feel gratifying, interesting enough to hold your attention, and produces something useful and beautiful at the end. The felting step adds a dimension of excitement and transformation that is genuinely unlike any other part of the knitting process — there is a reason so many knitters describe the moment of pulling a felted piece out of the washing machine as one of their favorite experiences in craft.

Make this pattern once and you will likely find yourself making it again in every color of feltable wool you can find. It is the kind of project that builds a small, satisfying collection: one for keys, one for change, one for your travel bag, one to give away, and one more just because you found a beautiful skein of deep teal or rusty orange that was simply asking to become something.

Cast on whenever you are ready. The transformation is waiting.