Various embodiments of a hand tool shown a carpenter pencil tool are provided. The carpenter pencil tool includes a holder and a carpenter pencil. The carpenter pencil tool includes an adjustment mechanism that allows a user to change the position of the carpenter pencil relative to the holder when the adjustment mechanism is actuated, improving a user's ability to reach the carpenter pencil. In a specific embodiment, the adjustment mechanism allows a user to change the position of the carpenter pencil with one hand and/or a thumb. In various embodiments, the carpenter pencil tool holder includes a recess on an outer surface configured to engage and hold the carpenter pencil. When the carpenter pencil is held within the recess a pointed object can be extended through the holder at a chosen location to create a compass.