With a growing toddler, it seems that every other day I put on an outfit that doesn't fit anymore. I came up with a system to organize the clothes that don't fit any longer. I keep a gift bag (I have way too many of those) in her room. As I find something that is too small, I place it in the gift bag. When the bag is full, I transfer those clothes to the appropriate bin of clothes that is up in storage. I then only have to organize the clothes ever month or so instead of every time I find something that's too small. It's worked really successfully me.
I write today about it because the gift bag is overflowing. Guess it's time to put those clothes away!