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You will be wearing the shirt with the neck around your chest, just below the armpits. The neck hole needs to be big enough to accommodate this. Something that is 3 sizes too big for you would be ideal.  The shirt needs to be long enough to cover your hips and upper thighs. Pull your head, shoulders, and arms through the neck hole of the shirt. Tug the shirt down so that it sits around your chest, just below your armpits. The arms should be hanging loosely at your sides. If the shirt feels too tight, take it off. Cut the collar off, then put it back on again. Grab both arms of the T-shirt, and pull them behind your back. Tie them into a tight knot so that they cinch the extra fabric. If you are worried about the knot coming undone, tie a second knot. Grab both arms and pull them in front of your chest. Tie them into a tight knot, right under your bust, so that they cinch the extra fabric. Leave the dress as-is, or pair it with a cute cardigan. Tuck the arms into the shirt so that you can't see them anymore. Choose a belt that looks nice with your shirt, and wrap it around your waist.  If you want to turn the sleeves into pockets, pull them out, then sew or safety-pin the sleeve openings shut. Tuck the sleeves back into the shirt when you are done. The pockets will end up being a little above your waist. This all depends on how wide the shoulders of your T-shirt were.
Get a large T-shirt with a neck hole big enough to fit around your chest. Put the shirt on and pull it under your armpits. Tie the arms behind your back if you want a simple look. Tie the arms in front of your chest if you want a cute look. Tuck the arms into the shirt and wear a belt for an alternate look.