I use the website, PicMonkey. It's free (mainly-unless you want to get super, duper fancy)!
First, I just make sure to have a picture of Miss Adeline (that's not hard to come by ;) that has a nice foreground image of her, but also has a lot of background area so that text will fit.
Clear as mud? ;)
This has been such an easy, fun, and creative way for me to keep an update on Adeline each month after she turned 1! I try to be good and make these as soon as she turns another month old, but that just doesn't always happen. I can't imagine why! ;) If I forget what she's been up to when making my photo, I just go back and look at my Instagram pictures or my Facebook pictures from that month to get ideas.
I like to save these in a special photo "Adeline-Year 2" on Facebook and on my computer under Adeline's file of pictures, in which I have another file titled "Monthly Pictures". I also update them to the blog each month, of course. :)
I have noticed these do not print correctly from places like Walgreens, etc. (the text doesn't fit all within the dimensions of the photo). I would just recommend printing them from your computer on nice stock paper if you want them printed.
Other ideas with PicMonkey: Text art for blogs, etc, or you can even do collages and make a Facebook timeline photo.