Check out some rag quilting quilts. Buy a kit or put your own rag quilt kit together with the pre-cut batting squares and pre-cut flannel squares. Make your own or buy a rag quilt already made. You can find exactly what type of rag quilt kits, rag quilts or rag quilted bags that you are looking for. I like using flannel the best for my rag quilts. You can also use chenille although that can get very expensive depending on what size you are making. Chenille is perfect for a baby's rag quilt because it is really soft, cozy and wonderful and it wont take much to make one. Rag quilting kits are really great because someone has already dont all of the hard work and you get to do the fun part of sewing it together. Make sure that the person you buy your rag quilting kit from has already washed, dryed and iron the fabric before it has been cut. That way it wont shrink up on you and you'll be able to guage the ending size better. When I made my first quilt I didn't wash and dry the fabric before I made it. It was a great size, I loved it! Then I washed and dried it and it ended up being a baby blanket for my daughter! (haha) I was really shocked at how much it actually shrank up. Buying pre-cut squares can also open you up to patterns and fabrics that you would not normally have access to at your local fabric store or Walmart.