this one I've had for years from J.Crew, but here's one that's more affordable), scissors, box cutter, x-acto knife, cheese grater, very rough sandpaper, and some kind of protective divider (I used a padded packing envelope).
Before distressing any area of the shirt, make sure to insert your protective divider inside. This way you don't have to worry about cutting through to the other side of your shirt (or table). The first technique is to use rough grain sandpaper. Sanding a section will make the denim very thin, soft, and eventually will create a nice hole. The sandpaper is also good to use after cutting sections with your other tools to make it look less severe and more natural.
I also like using a box cutter or x-acto knife to slice a line directly through the fabric. After you have a clean slice, take your weapon of choice and with the tip, begin scraping the edges, exposing more and more loose threads until you get the level of distress and fray you want.
Cheese graters are also effective for creating holes and distressing the fabric. Keep your scissors on hand so you can cut away unwanted pieces of fabric or unruly threads.
The best part about customizing your own shirt is adding little touches that makes it unique. I created a distressed heart on one sleeve and made slices on the shirt along where my clavicle would be, so that it peeks through just slightly.
And don't forget the back - showing hints of skin takes a casual shirt and makes it a bit more alluring.
Chambray shirts have become a complete staple in my wardrobe. I reach for them no matter what the occasion and somehow they always work (with white cut-offs by the beach or a black pencil skirt and heels for a meeting). The ones I own are all pretty structured, but I liked the idea of taking one and giving it a more distressed look with some strategic rips and tears. It was an easy way to change up an old shirt and give it an entirely new look and feel. Here's how I did it:
Items needed: 100% cotton chambray shirt that has a fit you like (I used