First - decide how big you want your circle. For my project, I needed 5inch circles (to fit in a 6inch quilt block). I have a circle template for the 5in I needed, however, I regularly use a compass to draw them or trace around whatever I can find around my house - eg. Baby formula tins, spools of thread, dinner plates.
Trace your circle onto some cardboard. I use cereal cartons as I always have at least one available (sometimes I dont wait for the kids to finish eating the contents of the box!)
Cut out all your circles and place on top of the fabric you are using. Roughly cut out leaving approx 1/2in around each circle.
Using a large running stitch, gather the fabric around your circle - and tie it off. Now head over to your ironing board.
Press your circles. I like to do this a little bit at a time, carefully making sure not to press any folds into your nice curved edge. (I also use these covered discs on the backs when framing my Embroideries in the hoop!)
Snip the gathering thread and remove the cardboard circle.
Pin your circle onto your project and sew!
Any questions, leave me a comment!
-- My completed Penelope Quilt can be seen HERE