Tip: When you're working a small area such as a thumb, try reducing the number of needles you're using from five to four; alternatively, you might want to switch to a small circular needle.Cut the yarn; use a tapestry needle to thread it through those last 4 sts and pull them together snugly.
Thumb
Pull out the waste yarn that's marking the thumb. There should now be 5 "live" stitches on the bottom and 4 "live" stitches on top. Pick up these stitches onto 3 needles (figure A), join your ball of yarn and begin working in rounds in St st, picking up 1 st between the top and bottom row of sts on each side in the first round (you now have 11 sts total).
Note: Don't just yank the waste yarn out of the stitches -- you could cause a "ladder," or vertical raveling of rows. Instead, carefully pick out each stitch using a knitting or darning needle (figure B). It's a good idea to have a crochet hook on hand, just in case you do drop a stitch.
When thumb measures 2-3/4" from base of thumb, [K2tog] five times around, then knit the last st. Cut the yarn and pull through the remaining sts as you did for the top of the mitten. Weave in all yarn ends, making sure to snug up any little holes that might have formed at the base of the thumb.
Knit-Bit: To make sure you have enough yarn to complete the second of a pair of mittens or socks, place the finished item on a kitchen or postal scale and note the weight. Then place the remaining yarn on the scale. If the yarn weighs more than the finished piece, you should have enough to complete the matching item.
Right Mitten
Right mitten: Make exactly the same as the left mitten EXCEPT make the thumb on needle #3 instead of needle #2, as follows:
After 2", increase 4 sts evenly spaced all around (you now have 32 sts; make sure there are 8 sts per needle).
When piece measures 4", mark thumb as follows: on needle #3, knit 2 sts, then knit the next 5 sts onto a piece of waste yarn. Now slip those 5 waste yarn sts back onto the left needle and knit across them with the working yarn.
Continue until piece measures 7-1/2" (remember to measure from where the stockinette section begins, not from the bottom of the cuff). Begin decreases at top of mitten as follows: SSK at beginning of first and third needle, K2tog at end of second and fourth needle. Do the decreases every third round twice more, then start doing the decreases in every round until only 4 sts remain.
Continue as you did for the left mitten.
Tip: One ball of the cuff yarn will be more than enough, so you may want to buy variegated yarn for the cuffs and solid colors for the gloves. That way, you can knit several pairs to give as gifts!