We use artwork to wrap presents, and to make cards. I don't remember the last time I bought wrapping paper.
Little bits and pieces go in our craft box (an enormous tub with lid on wheels) for future use and toys get divvied up into types and tubbed up, for rotation (so the kids never get bored of their toys - we just put those ones away, and get the next tub out for rotation.
Similar to a few PPs, a few years ago I was feeling swamped by DD's creativeness. Her and I struck a deal that it could be thrown/recycled/regifted if I took a photo of everything. At the end of the year I make her and now DS a photobook of that year's art.
I do not have enough room to keep everything so some stuff is stored in our shed and brought out periodically. Other than that we decide every few months if there is stuff to donate when I am doing a charity run, or I ask them if there is anything they love particularly as I want to do a clean out of all those little knick knack/plastic toys type things. When I do sort to remove I show them. They hardly ever mind.
Photos of craft work once its ready to be re-purposed (painting etc become wrapping paper). Craft items depending what it is eventually end up in the bin once the child is no longer interested in it.
Toys & clutter are tossed (if broken) or donated. The kids know I do it & are ok with it.
2D stuff is displayed on a window for a few weeks, then we scrapbook them. I take Photos of 3D artworks, then put in the scrapbook too. Have been meaning to do the digital photo frame for a while though...
As for toys etc, I'm a bit of a hoarder too. I might need it for Bub no2...
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