I try to keep it organized by type of yarn... sock, lace, DK, etc.. Sometimes if I know what it wants to be, I keep it in a project bag. Or sometimes I actually buy a kit project.
I've been trying to finish the UFOs in my various knitting bags. I've got one bag with 3 projects. 2 bags with 1 project each. A bag in my truck with 2 small portable projects. Like I said ... like I need more yarn.
But since I have no will power .... I'm sure I'll come home from MSW with more wool.