Step 3
Open your background file, and select a section that you'd like as your new background. Copy it, and select Edit>Paste Into.I could have stopped at this point. The background is fun, but I'll continue adding my watercolor textures to the photograph.
This time, I chosen the sweater with the magic wand. And before pasting inside, I chose Select>Feather... to soften the edges. I once again used the same watercolor background as I used for the sky. It's important to maintain a "look and feel" through out your work.
Step 4
After pasting inside, as in Step 3, I altered the brightness and contrast, with Image>Adjust>Brightness/Contrast and changed the color balance - Image>Adjust>Color Balance.
I went back and forth between Brightness/Contrast and Color Balance before I was happy with the results. You can always delete the layer and try again.