ibeesewin

I use flannel and ½" seam allowance. Sew a couple of samples and see what seam you like best.

Here is a link for rag quilting 101. Says to use a 1 inch seam allowance.

http://www.quilting101.com/styles/rag-quilts.html

Here is a picture of a rag quilt I just finished. It is flannel with 8½" squares with ½" seam allowance.