When we bought our house I was certain we'd have PLENTY of storage space, we'd never even start using the 2 walk in closets, the 2 "storage" closets, the guest room closet, the garage. Four years later and I've become frankly overwhelmed with the massive quantities of things we have in our house.
So I decided in my quest to "conquer clutter" that I would hit up She-she's closet, since hers was the worst of all of them, stacked with things that really didn't allow me to use them.
I started by ripping everything out - I gutted it, removed all clothing, pulled all shelves, all "extra's" (As an artist she'd gotten a lot of my "supplies") then I went about sorting and trashing and organizing.
First I followed "The Saved Quarter's Blog by Penny Saver" tips when she discussed picking up kids clothes for next to nothing. I organized She-she's clothes out into what we had - though I need to go through it again as this was almost a year ago when I went through everything.
I wanted her to have ample room in her closet for her clothing, since it was the only place I wanted her clothing. Then I chose a color scheme.
Since my daughter is a very girlie-girl, (And I had several of the "totes" already) I chose pink and black.
After putting away all of her clothing I sorted Arts and Crafts, DVD's (She has many little videos for "nap/quiet" time) And blankets. I also needed a permanent place for my scrap-booking supplies.
By following the simple color scheme the closet ended up having a cohesive look despite the fact that there was still a lot of different types of things in there. You'll likely note the car-seat base, and possibly the luggage in the back corner beside her dresser. The pink totes I picked up at Target in their $1 section. I then took an old diaper box and wrapped it with the black and silver paper I had left over from a wedding. The other pink totes were given to me from my mom and MIL while I was in the hospital with She-she.
Simple and cheap we were able to have access to her clothing and toys and my craft supplies at any point.