I found reynolds freezer paper at the grocery store.
Any acrylic paint works if it's mixed with textile medium (craft stores carry it) so that it sticks to the fabric without cracking and can be thrown in the washer.
Get these supplies together:
pencil or pen, ruler if you need it
paint brush or sponge
piece of cardboard
shirt or whatever fabric you want to stencil on to.
I drew out my design on paper and then cut out some freezer paper. I don't have a light table so my big trick is to hold the drawing on a sunny window with the freezer paper on top of it so I can see through it to trace the design onto the freezer paper.
This is the ONLY tricky part - cut out the design with the exacto blade. Don't cut yourself and don't cut outside the lines. Just go slow. I put the freezer paper down on top of the cardboard for this so I didn't cut up the table underneath.
If you have a free floating bit like the centre of my "E" just cut that out and set it aside. Don't lose it in your scraps though
. Keep a picture of your original design handy if you need it to see where those bits should go.
Place the stencil shiny side down on your fabric and press it with a warm iron for a few seconds (just press, don't move the iron back and forth). It will stick on but don't worry, it peels right off again later on and doesn't leave any residue behind. If you have any of those free floating pieces (like the centre of my "E") place them where you want them now and press them to stick them down.
Put the piece of cardboard inside your shirt so no paint soaks through to the other side.
Mix your paint and textile medium together (I used a toothpick for that) and sponge it onto the fabric (you can use a paintbrush for this step if you prefer).
Let it dry for a while and when it is dry enough (not sticky at all) that it won't smudge peel the freezer paper off, including any free floating bits though you may want to lift the edges of those up with a pin or fine tweezers to avoid any possible smudging.
At this point you can heat set the paint by turning the shirt inside out and ironing the stencil with a hot iron (cotton setting but you might want to patch test your fabric or at least read the care instructions first) for 20 seconds. For this step I put the cardboard back inside the shirt so there wasn't any chance of paint transfer.
My textile medium says to wait for 7 days before laundering and to wash in cold and hang to dry to prevent fading.