I have tried to type out how to do this, but gave up and deleted it because my explanation was clear as mud & I was afraid I'd mess you up. I'll try again though...just bear with me. Also, I gave my booga bag away as a gift, so this is from memory & heck, I'm not even sure I did it the "right" way, but it looked great.
For starters, you have the tops pinched in a couple of inches on both sides, like sideways V's.....> and <, right? So, it's sort of like a sandwich if you look at the top of the bag head on - one long side, then the top of the sideways V, then the bottom of the sideways V and then the bottom long side:
_________ except that those v's connect to the long lines. With me so
Your tied, knotted ends are going to wind up inside those v's.
Let's work with the left side first. Poke a hole through the top part of the V, centered pretty much in the middle of that V. Continue poking through the adjacent top long side. Pull your cord through these two holes. If you mess up, don't worry, felt is forgiving. Now repeat this on the right side, and pull your cord through these holes too. Remember to thread the cord so that the ends/knots are in the V's and the handle itself is on the outside of the bag.
Repeat that whole process on the bottom with the 2nd cord. Make your knots and you're good to go.
I hope that helped. Like I said, I have no idea if that is the right way to do it, but it's cute and functional.