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One of our favorite gifts this year was a set of fabric markers and shirts to decorate.  The kids had a blast and got to keep the markers and wear the shirts.  Thanks Aunt Emily!  There are lots of fabric marker options, and the glitter pens were especially popular.  Look for ones that dry quickly without ironing so the designs can be worn right away.

Last year we used fabric markers to decorated fabric totes from Ecobags and t-shirts from American Apparel.  These make fun projects or favors for a party as well as great gifts.