I'm going to buy a pretty (good sized) box for each of my kids and file them away after writing the date and maybe what the kids say about the peice on the back. I will display a few of the really meaningful or pretty peices then either store or give away the other things. I use some of it as wrapping paper or cut it up and make cards with it sometimes. My mum loves this, she's always so careful not to rip it and keeps the paintings, lol!
I take all Ben;s school work etc into a bin and at the end of the term. I go through it all with him and we get to keep 3 things. At least we keep special things and he learns to toss some things as well.
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