Step One: Use a paper punch or cut out your paper circles. Mine are about 2" in diameter. You will need 6 circles per ball.
Step Two: Fold all 6 circles in half, with the decorative side in.
Step Three: Use a glue stick or double sided tape to glue all of the half-circles together in a stack.
Step Four: Leave about 6 inches of string on the end. Cover the last paper circle with glue and stick the string onto it. Then close the two remaining half circles to form a ball.
Step Five: String as many as you like.
Here's the finished result, along with a couple of other styles!