if it says 3 1/2 inches unfinished, this is what it will be after you have pieced the BLOCK. When you sew it to the other blocks, it will be 3 inches..1/4 inch on each side for seam allowance. They tell you this , as an unfinished measurement, so you can keep track of your size as you are piecing. If you have a problem you can work it out SMALL, instead of doing a big block and having BIGGER problems!