Stitchaholic

I was wanting to attach a piece of a bandana to the inside of a leather wallet where the bills go, with contact cement. My question is, what should I smooth the inside of the leather with and what do I lay the fabric on to brush on the cement. Maybe I should just sew the fabric to the top of the leather and let it just hang inside with the bottom and siides sewed together. This is my first wallet.

I just got started in doing things with leather. I bought a piece of leather from Hobby Lobby and a small set of tools from Amazon. My problem is, when I watch the leather working videos on youtube, and someone is using there stitching groover. The small hole has a thin strip of leather coming out of it. When I do the same, the hole fills up, but nothing comes out and yes I cleaned it out with a needle, but still nothing. Anyone have this problem and what can I do?