You have to first decide where you are going to keep toys in your home. Are you going to confine them to one "toy room" or have a few scattered around the home in bedrooms, the family room, etc. There is no right or wrong answer with where to store toys in your home, the important thing is to decide where the specific space or "home" for the toys will be.
|Kusiner Mesh Basket, $4.99 from IKEA|
Which brings us to the age old problem (or just the 21st century American problem) of having more things than space to store them. Your next step may be to pare down toys that are no longer played with or age appropriate (see Toy Organizing: Assessing the Past for tips). You may also want to consider rotating your children's toys to keep things fresh and within the confines of the desired toy storage area. Simply divide out some of the toys into a large plastic storage bin or garage bag and store them in either the garage, basement or attic. When kids begin to complain that they are bored with their toys or want something new to play with, exchange out the current stock with the toys from storage.
The final step to dealing with toy storage is controlling what comes in. If you spend time and money organizing what you have now but double the amount you have when the holidays or a birthday rolls around, you're back to square one. Consider asking for or giving non-material gifts such as lessons, memberships to museums or zoos, season passes to amusement parks and tickets to concerts or shows. For more on this idea, here is a great article from Psychology Today discussing "Why Experiences are Often Better Purchases Than Things."
If you have any thoughts, ideas or tips on organizing toys and controlling toy clutter, feel free to share them below!