When I cut my binding, I cut it at 2.5 inches, fold it in half and iron it. I trim the edge of my quilt before I sew it on, but leave it a bit wider and trim it more as I sew down the binding by hand. So I use the 1/4 inch from the edge of the binding on the quilt but it may be a bit more when I trim as I sew. The majority of my quilts I use flannel for the back so need to make sure there is enough so it doesn't pull out. (I sew around twice, so my binding is attached.)