Well, I have mine by color if they are large enough in my fat quarter rack. Remember it takes more to do ITH and applique than you think so if I have REALLY itsy bitsy teeny weeny scraps I toss them. Sorry, because I do know there are people who actually use those little pieces. Maybe for a landscape quilt or photograph quilt. I use to keep them and donate them at my quilt guild but I'm with a different guild now. I still have 2 fat quarter bags with those itsy bitsy pieces but I'm getting closer and closer to tossing those. Just not big enough for what I do these days and I don't think I'll ever get around to a postage stamp quilt. hehehe

I have fat quarters in a clear tub, and have them organized by color - I put the small pieces of left over fabric in with the fat quarter stash - these then are on a shelf in my cabinet. But, to tell you the truth - this is overflowing. LOL I do a lot of applique and these come in so handy. I just started another "stash". These are the strips that I had cut for a quilt. I am trying to organize them by the width of the strip. Again, stored in a clear tub.

We just had a guest speaker at our quilt meeting this past Monday. She had a very good suggestion for us. She had 4 clear see through plastic bins that stack nicely. I imagine you can find them at Wal-Mart or maybe Joann's Fabric. Anyway she said she takes 10 mins of every day & goes through her scrap basket. She takes the pieces press & cuts them into the following sizes. 1 1/2, 2, 2 1/2 & 3 1/2. She says she does not cut into 3 because the above pieces when used in a scrap quilt will fit nicely together but a 3 will not. She showed us beautiful quilts made out of these scrap pieces of fabric. A few members of our club are collecting smaller scraps & cutting them up for stuffing to make dog pillows for the shelter here.

You can see the fat quarter rack in this picture to the right. I bought it at a Hancock fabric closeout sale. It had more wire dividers but I had my husband cut them out and the fat quarters fit right in there.

I;m with you heres what i do now don't laugh ok i have a big old can made of tin that used to be a flour bin in the 1920's .Anyways i throw all my scrapes in their (out of sight) then when i need a scrape i dump them on the floor ,find my color then throw them all back in lol my neibour painted it after i sprayed it grey .Now you can see i left the lid off so you can see in it lol carolyn

I was going to suggest that you iron it flat and store in a baggie - but perhaps you have more scraps than I do - I like the suggestions from the others, too.

Great question. Loved the answers. Now I need to go and apply it. He, he but I am here.