1. Invest in a horizonal filing system. I have one slot for each child. I use post-it notes folded over to label them. This one is chock-full of last year's papers because I haven't yet gotten to steps 4-6.
2. As papers come home, decide what's worth saving. I don't keep many of the math papers or coloring pages. I do keep every report card and a representation of their best artwork. If in doubt, I keep it, because I have another chance to purge it later.
3. As the year goes on, put the papers you are keeping in the horizontal file. Keep up with it all year long and it's not hard at all.
4. At the end of the year, pull out sheet protectors and a binder. Here's one I've made for Joey several years ago (at some point, I'll fancy it up with a nice title page, but for now, this is what it looks like. I have a divider for each year so they can be kept in one binder but stay separated).
5. Pull out the stack of papers you've saved the whole year long. Because you've been putting things in the pile all year long, they are in chronological order already. Just turn the pile upside down, and start putting everything in sheet protectors and into the binder. Now is also your chance to do a final purge of stuff you don't need to keep.
6. Enjoy looking through your child's papers or letting them look at their scrapbook from that year!
Notes like this make all this mothering stuff worthwhile:
Translation for those of you not up on kinderese: "I love you Mommy because you take me on rock hunting."
What do you do to manage your kids' papers and keepsakes?