One way to make new clothes from old ones is to decorate the worn garments so they look new again. Another method is to repurpose the old garment into a new one entirely.
Decorating old clothing involves choosing a garment that's still in good condition and adding embellishments. For example, sew pearls onto the shoulders or collar of a shirt for a finished piece that's more formal than the original.
Another option is to cut out a decorative fabric design, such as quilting from a pillowcase. Apply fusible web to the back of the fabric design, and place it onto an old sweatshirt or jacket. Use a hot iron to fuse the fabric in place, and reinforce it with sewing.
Repurposing clothing can sometimes be done without sewing. For example, transform a maxi skirt into a dress by first cutting off the waistband. Use a tank top to gauge sleeve placement, and cut triangles off the corners. Leave the straps long enough to accommodate tying at the shoulders. Next, cut out the neck and back, and then tie the shoulder straps in a double knot.
Turning a sweatshirt into a skirt requires some sewing. First, cut off the sleeves and neck, resulting in a rectangle of sweatshirt fabric. Carefully cut two holes into the hem of the shirt, and thread a shoelace through to make a drawstring waist. Roll the cut edges of the shirt under, and sew into place as a hem.