To begin, I downloaded a fun font from dafont.com. It's a free site and very easy to use. This is my personal favorite, "Badaboom." You can experiment with different sizes and fonts, but keep in mind that the simpler the shape, the easier it will be to work with. I usually look for block-y shapes with no swirly designs. Print and trim the paper down to a more manageable size.
Tape the sheet of paper of paper to a slightly larger piece of freezer paper, with the design side of the paper touching the waxy side of the freezer paper. I like to tape along all four sides of the paper to keep the sheets from sliding as I'm cutting out the letters.
I prep the onesie by sliding a piece of cardboard inside. This will prevent the paint from soaking through. Next, set your iron to the hottest non-steam setting and place your template on the fabric, making sure it's centered and/or lined up correctly. Lightly run your iron over the template, melting the wax and sealing the template to the shirt. Run your fingers over the letters to make sure none of the edges of your design are unsealed. The wax backing of the freezer paper will stick to most cotton fabrics nicely, but will come undone if you iron over it too many times.Paint over the stencil using acrylic paint. I use a foam brush and apply the paint in dabbing motions. I try not to rub the paint in because the stencil could always unstick from the fabric. This has never actually happened to me, but I'm careful anyway.
Wait (patiently) until the paint has dried and peel off stencil. Voila! A cheap, personalized gift (and my first ever blog tutorial)!