Closet:
Let's get to the root of the problem! We hang up most of their clothing. For one, we have a 3 drawer dresser for both girls. We also just like to hang all their nice clothing.
We added a rod half-way down the closet. Now there are two. I hang the winter clothes on the top shelf and the summer on the bottom. I switch them as the weather changes.
In the center of the closet I have a hanging basket. We got it at Toys R Us for around $25. We really have gotten good use out of it. There are four baskets that hang from the rod. I have the two bottom ones for the shoes. One is Charisa's, the other is Cailynn's. The top two are used for the hair bow boxes and the other is for the hats and purses, etc.
On the floor of the closet, I put the plastic drawers that you buy at Wal-mart for $3. I put miscellaneous toy items in there.

The top of the closet is to store large toys that I don't want them to have very much. Also things like blocks and beanie babies.

To keep them out of all those toys and clothes that are stashed, I added a lock at the top of the closet door. It's the kind with the little loop on one end and a hook on the other. Just remember to always lock it behind yourself!
Notice that not one single space of the closet is used for myself or my husband. This is just their closet. This makes them feel like individuals and keeps your stuff out of their room. If you have things in your children's closets, when you move it out, you will see a difference in how you feel towards your children and how they react to you.

 

Dressers:
I would first like to recommend the ones we have. You can get them at Wal-mart for $80. They are white and I put little rub-on bears and other cute things on as decoration. On the left side of the dresser is a cupboard with a door. We put a child lock on it. One dresser is used for all the children's books. The other is used for puzzles, girl blankets and baby clothes, etc.
Then there are two shelves on the right. They are covered. I added plastic drawers (the $3 ones from Wal-mart). I use one of them for socks, one for panties and undershirts, and the others can be used for whatever! You can fit 6 small drawers there. I only have three and use the top shelf for pictures.
The actual dresser drawers. If your kids are always in the dresser, this is what I do. I put child locks on all the drawers. We put them on the side so that when you pull the drawer open, you stick your finger in the side and pull it open. The children cannot do this. I put the locks on the two bottom drawers. I keep the winter clothes-or whatever is out of season-in the middle one, and the bottom is for pj's. They have no business in any of the other two. I left the locks off the tops drawers so I'm not always having to unlock the drawers for them to get themselves dressed.

The top of the dresser is pretty high for small children. I use this for their knick-knacks and pictures and nice stuffed animals.

If you have a regular dresser, you can still put those plastic drawers on top and they stack too! Can't you tell I love those drawers!! Again, I would recommend putting child locks on all the drawers you don't want your kids opening.
 

Toy Boxes:
Let's go over the different types of toy boxes you can use:
My dad made a nice wooden one. They are very sturdy and easy to make. If you are going to make your own, please remember to put small holes in them for breathing. If your children are anything like mine, they'll empty the toy box and sit in there!
I really like the Rubbermaid bins you get at Wal-mart! We have one for stuffed animals and one for miscellaneous toys. The children cannot open them! The only available toys are the ones in the wooden toy box. I let them have the "special toys" on certain occasions when I know I have to totally clean their room anyway!
You can also buy the pretty kind they have at Toy's R Us. I'm not one to pay a lot of money on something to keep the toys in. If you have any recommendations.
 

School Work
If you have an older child that has school work that you want to keep. Get a small filing cabinet at Wal-Mart to have your child file his/her own papers. I would recommend putting child locks on the those drawers too especially if you have young ones in the house.
Another thing you could do is get either an accordion file or a milk crate and file them in their and keep in the top shelf of a closet.

More schoolwork ideas found here.
 

Clothes
Clothes that you have that the children have not grown into yet. What I do with those is buy the bins that fit under the beds. Fill those with the clothes. You can also use those bins for other storage. This also helps keep from getting too many toys and things under the bed, because its already full underneath!
 

Shelves
A wonderful way to keep knickknacks or nice stuffed animals out of the children's reach is to make your own shelves. We got a long piece of wood at Lowe's for about $6. Then we bought the little shelf hanger's already cut and shaped for about $6 too. You can stain it if you'd like. Now you have a large shelf for stuffed animals and babies to stay clean and out of reach and it only cost you about $12!