Take a piece of coarse sandpaper and color your design on the rough side. I free-handed some hearts and flowers. Since my son isn't old enough to really draw designs yet, I cut out some shapes and letters for him to color. Remember: When cutting out letters or when coloring words, you must make them backwards so when they are transfered, they face the right way.
Now for the adult portion! Take your material (shirt, bag, whatever) and put it on your ironing board. Be sure to put a piece of white paper or aluminum foil under the layer of fabric you are putting your iron-on on. If you don't, the crayon will bleed through. Place your picture on the fabric, crayon side down. Now iron it on. Be sure to move the iron very slowly and iron for 10-20 seconds (don't burn your shirt though).
Now, carefully peel off the sandpaper while its still hot and ALL done!!
Wait until your child sees their masterpiece on a piece of clothing. They'll love it!
BE SURE TO READ THIS: While handwashing is best, you can wash your project in the machine on cold. DO NOT DRY YOUR PROJECT IN THE DRYER! Not only will the crayon melt all over your project, it will probably ruin all the clothes in the dryer. I know this from experiences with crayons left in pockets.