First, ask yourself WHY you have a problem with clutter /organization. Not all of us have the same reason. Me, for example, I have a knack for organization . . . but I am not happy with my systems unless they're perfect. So I'll be messy with something (say, socks) 'til I get around to creating a system. Once I do, it'll be simple, efficient, and I'll use it -- but getting me to create that system isn't easy. I don't want to start until I know exactly what I want, where I want it to be, and what equipment is absolutely best. My husband, on the other hand, is simply lazy about the house. He doesn't care. He could have a super-easy-to-use organization system, and he wouldn't use it. For example, a couple days ago he received the first of our tax documents in the mail. I reminded him that a couple years ago I made files for our taxes (blue files for taxes, green files for investments) all the way up to something like 2030, and he needed to file the document while he had it. Of course, I found it later on the desk with the other mail.
So before you start on anything, figure out WHY you're not organized. If it's a matter of not having information, seek out books. If it's a matter of procrastaination, set yourself goals for each month. But understand your own motives first.
Second, identify the areas that're bothering you MOST. Don't try to organize everything at once -- you'll quit. Pick perhaps three items that're really bothering you. For example, you might decide that your overflowing closet is frustrating -- you have nowhere to put clean clothes, and it's making your mornings chaotic. Or you might realize that your pantry is a mess. Perhaps you're buying spaghetti sauce only to figure out too late that you already had two jars hidden behind the flour. If those are your biggest problems, attack them first and let the kids' school papers go for the time being.
Third, start with something small. If you organize the coats and umbrellas in your entryway, you'll feel that you've accomplished something and will be motivated to continue. If you start with the attic, you'll give up before that huge job is done and you'll not have the reinforcement of seeing your work every day. It's better to start with a bathroom and finish it than to begin massive plans for the living room /family room /kitchen and quit halfway.
As for saving kids' things, I suggest a moderate approach. I saved one box of baby things for each of my girls. I saved one maternity outfit, the dresses they wore home from the hospital, their first Christmas dresses, and a couple other little things that I thought they'd possibly enjoy having as special memories. One box doesn't take up much space, so if they end up with all boys, or if they have large girls born in winter (I had small girls both born in spring), it's not like the effort that went into saving things is wasted. In the same boxes I put away a couple little things I'd enjoyed with them: A few spoons and plates, etc.
I have saved a small number of toys and books (nothing broken, nothing scribbled upon), which I intend to keep FOR ME to have for my grandchildren at my house. I remember loving the toys at my grandparents' house so much.
Specific methods that work:
Box things together so they stay together. For example, I have several air mattresses for guests. I bought two big plastic storage bins and made two "bed kits": Each box contains one air mattress, one set of sheets, one blanket, one air compressor. The boxes are clearly labeled "queen air mattress" and "two twin air mattresses" so there's no rummaging through the closet for this or that. When these get used, I wash the sheets and return the whole box to the closet.
Box up clothes that you're saving "just in case". Like many people, I was saving some clothes that I'd loved and hoped to wear again SOMEDAY when I lose 10 pounds. They were cluttering up my closet and becoming out-of-style. My husband complained if I bought new things because I had a closet full of stuff! So I boxed up the things that I wanted to wear but couldn't, and I put a date on the box -- one year later. I told myself that IF in one year I had lost the 10 pounds and could wear those things, they could come back to the closet. If not, they had to go to Goodwill. They went to Goodwill.
If you're having trouble with sentimental items, consider whether you really like them and whether you're using them. Don't keep things that you don't care about and will never use are just taking up space. So if your grandmother's silver goblets look wonderful next to your wedding china, keep them -- they're adding to your dining room's atmosphere. But if your grandmother's expensive crystal, which really isn't your taste, is going to sit forever in a box, give it away or sell it.
Use your prime storage space for things that actually get used. For example, let's say that you -- like most people -- have a full set of china, but you never use the coffee cups /saucers. Instead, you use mugs. Get rid of those never-used coffee cups, or move them to less-accessible storage in those little cabinets above your refrigerator. This'll give you more space for the things that you really do use on a regular basis.
Streamline your storage. Look for things you can do to make your workload easier. For example, in each bathroom I have a storage box for washcloths. I don't bother to fold them -- i just toss them in the box. They're washcloths. I don't care about them! If they were just tossed in the closet, they'd be messy, but in a box, they're neat. Does this save much time? No, but if I do a dozen little things like this, the time adds up to real savings. Another example: I bought a BUNCH of little tins with clear covers and dumped all my spices into them. Because the tins are all the same size, it's easy to keep them alphabetized, and I can tell at a glance whether I need more Coriander. This works well for me because I buy my spices in bulk at a health food store (the savings is amazing, and the quality is great). Someday when we build our retirement house, I plan to have a couple shallow drawers for these tins, and then it'll be even better.
As you embark on this project, start with some library books -- TONS of books are written on the subject of organization. You'll have to sort through many ideas that won't work for you, but you'll find enough gems to justify your time. Books on house cleaning tend to have good ideas too.