Hi! I had this problem once upon a time. Last year infact! I'm so glad I finally figured out a good system that worked for us. For me, I started a log and wrote down how many outfits of each type each child would need:
Play Clothes (7-10 outfits)
Stuff they can wear outside to play in, get stained, ect. I just wash and dry this stuff, and don't worry about stain treating it. If it gets too bad Ijust toss it. Most of the time this is all hand-me-downs or items I buy used.
Nice Play Clothes (3 outfits usually)
Nicer outfits that are good for going to town, on picnics, family outings where they still need play clothes, but I keep this set nicer w/o stains, ect. I normally buy them matching stuff for this category b/c they like to match when we go out. If something gets stained or excess wash wear, I bump it to the Play clothes category and get rid of one of the most worn outfits. These outfits go either in the top drawer of hte dresser or hung in the closet, even the shorts, so the kids won't wear them to play in the mud in!
Nice Outfits: (2-3 outfits)
These are the outfits we where when we go out someplace nice. THey are usually dresses, stuff I try to keep really nice. If they get too many from this category, I bump one tot he lower category. I keep this stuff hung in the closet, and usually both girls match. At the end of the season these clothes are usually still in EC, so I plan to sell them.
A few things that I have done that have cut down on the clothes mess:
1. Only buy in outfits. I keep a few extra shirts, but most everything has something that goes w/ it. THis keeps from haveing all mis-matched odd ball peices that don't really go w/ anything.
2. I like to get mix and match tops and bottoms from places like Gymboree (on sale, usually less than $10 per piece, Ilike to keep it at about $15 per outfit and have been able to do so if I watch the sales and such). Last year I got each girl 3 tops and 3 bottoms that all mixed and matched. It was great b/c they could pick the pink, green or blue top, and then a pair of shorts to wear w/ them. Easy! The hair accessories were all the same, so t hat cut down ont he hair stuff mess I seem to always have. This was for the nice playclothes category. We wore them to town all summer and they still look great! I will pass them down or wear them again next year if they still fit.
3. Hand-me-downs are great, but there is a limit to how many you will need. Keep this in mind. I keep about 5-7 outfits per season topass down. I cut down my HUGE mess of rubbermaid containers down to basically 2 smaller rubbermaids, one for each girl. I like to keep the jeans b/c they are most expensive to replace, and then outfits only. I also do not keep the nicest outfits, since I have learned that I like them to match. I sell them the next year and re-coup some of my money to buy the new matching stuff. I also keep most of the shoes, and I get hand-me-down shoes for my odler DD from a cousin. THis year I only had to buy her tennis shoes!
4. Keep a log of all you have, so you can refer to it if you want to buy something. Always know what exactly you need for each child. A bargain is not a bargain if you do not really need it. THis is a lesson I have to keep repeating to myself
You can also use this when MIL asks waht the girls need! My MIL and mom usually buy them each a couple of outfits per season, so I can tell them casual, dresses, or whatever they need. I also have a long list of shoes that have been handed down to me, so Iknow what tupes of shoes I have, and try to only get stuff that doesn't require alot of different shoe types (although both my girls seem to always have TONS of shoes for some reason).
Well those are my tips and what has worked for me. I normally wash everything in my girls drawers about once a week, so it gets alot of wash wear. Right now the clothes are washed but not folded. My babysitter just had to ask where their clothes were b/c there are literally NONE in the dresser. I have them all on one laudry basket, and will go thru them tonight and pare down after the holidays. Good luck to you!