Need help with size backing for dresden

[grannyann]

I need some ideas on how big to cut my fabric.My dresden piece measures 17 1/2 TO 18"circle depending where I measure it.
So lets say 18" , now should I cut my square 20" leaving 2" on all sides or cut a 22 " square and center it then I will put the binding on. Also some one said I could cut the material from the back of the dresden foundation for less bulk but this is my first attempt and I don't want to mess it up.I just spent $10.00 on the material for the backing.Here is a picture of the fabric my local quilt shop helped me pick out.She said I should use black thread when stitching down the points and sitching them scares me to death. Thanks for any and all help. I am beginning to get a bit panicky here.