Using the circle diameter called for in the pattern (approximately twice the finished yo-yo size plus 1⁄2"), make a template. Small plates, bowls, cups or a compass can be used to make the template. On the wrong side of the fabric, use the template to trace a circle. Cut out the circle on the marked line.
Turn under a scant 1⁄4" to the wrong side of the fabric. Sew a short basting stitch around the circle, leaving a knot and thread tail at the beginning of the circle.
Pull on the threads to gather the fabric, making sure the right side of the fabric is on the outside of the yo-yo. Take a few stitches to secure the gathering stitches and tie off. Clip the threads close to the knot.