I recently cleaned mine out and retired old sheets and towels.
Now we have 3 sets sheets for me/DH. I usually wash them as soon as they come off the bed so that will be plenty for us.
For the kids they each have 3 sets cotton sheets and 2 sets flannelette. They also have two mattress protectors and 2 doona covers each. Likewise I wash doona covers/mattress protectors straight away if needed and I've never been caught short yet!

Towels I just retired some that were getting a bit tatty so I need to get a few more I think. At the moment we have around 6 nice towels (probaby not enough) plus a towel each which are just for swimming lessons. Might go and get the kids a few more. Love linen shopping lol!!