Step 1: Go to supermarket and purchase a range of ziplock bags. There will be a range to choose from - some with "zips" and some you just squeeze together. A word of warning: some ziplocks are better than others. My bag of preference is made by Glad. Good sizes, zipper thingy rarely fails and they have a writing panel on them if you wish to label your yarn. They also come in an "easy to dispense" box with a zipper flap (how much fun is that!)
Step 2: Keep ziplock bags in convenient place near your yarn stash, for ease of use.
Step 3: Each time you purchase yarn, ensure you select an appropriately sized ziplock bag for storage. Label, or not, as you wish.
To give you a feel for size:
A small bag (sandwich size) will hold two small skeins of sock yarn.
A medium (lunch) size will hold around 4 50g skeins/balls
A large bag will hold up 8-10 50g skeins/balls of yarn.
My preference is not to mix the yarn in a bag - one type of yarn (eg 4ply, 8ply, sock etc), one bag. Different yarns, different bag.
Step 4: Carefully pack yarn into selected bag, ensuring labels are (as far as possible) all facing same way and so that you can, depending on the structure of the yarn label, read the colour, dyelot and gauge information without needing to open the bag.
Step 5: Pack bagged yarns into yarn storage cupboard/chest of drawers.
Step 6: Gloat at your level of organisation. Do not tell anyone that the rest of your stash is piled up in plastic bags in the corner of your stash/junk room, waiting for the never-to-arrive day when they will be bagged and packed.
I know this is breaking the rule in step 3, but these are set aside, in their ziplock bags for a special purpose - the draw will be conducted tonight, so there's still time to leave a comment on this post! (And ziplock bag will be chucked in as well!)
Tomorrow: Results of the draw
Friday: Part II: The proper use of ziplock bags in organising your WIPS