Circles are easy!
~~Make a little cardboard template of whichever size circle you are making. Index cards are good for this or any kind of stiff paper that isn't too thick.
~~Trace around it on the wrong side of your fabric. Cut the fabric out approx 1/8-1/4" away from the drawn circle.
~~Sew a basting stitch along the edge of the circle of fabric--doesn't need to be perfect.
~~Now put the template on the circle and pull on the basting stitch to pull the fabric up around the template.
~~With your iron give it a little bit of heat to set it.
~~Remove the template and your circle is already to stitch into place. If you gathered the edge neatly, you should have a perfect circle to stitch.