I don't cut my selvages off until I am ready to cut my project. I figure out how many pieces I can get out of about 41 in. of fabric and cut all my selvages at that size. If I'm doing strip piecing I cut to the most narrow fabric, that way when I sew the strips together they are all even. I hate it when sewing strips together and have one strip 41" maybe the next one 44 and then another some other width.
I always cut my selvages off before cutting out my pieces. you get a truer cut and don't have to straighten it up as much. Plus, it is hard to use 2 or 2 1/2" pieces of selvages.