I say, "Cut away." There will always be more fabric to buy and who doesn't need a good shopping trip? I find that if I use that perfect smidgen for something, I can always find one even more perfect for my next project. I just finished a little pony applique for my DGD and am just beginning an appliqued owl one for my DD. I just love digging through by scrap bins and picking out 2 or 3 fabrics that coordinate for the perfect applique. Use the scraps--you can get more!