Making rugs out of braided rags is an old American tradition.  All you need is old fabric or clothes, scissors, needle and thread and a few twist ties. 

Cut the fabric into 3" strips about 24" long.  Tie three strips together at one end with a twist tie.  Braid the strips until you are nearly at the end.  Wrap a twist tie at the bottom of the braid to hold it. 

Thread the needle with a double strand of thread and sew a new strip to each of the old ones with two or three stitches. 

Keep braiding, removing the twist ties as you go, until you have a long braid.  Repeat the process until you are ready to start coiling.  Make a coil with the knot in the center.  Stitch the rows together as you go by poking the needle up from the bottom through the edge of the inner coil and catching the edge of the next coil.  Continue adding fabric, braiding and coiling until your rug is as big as you want it.