I don't have a lot of space either, but I find cutting my scraps ala Bonnie actually saves on space. I do 2, 2.5 and 3.5 strips. Any strip larger than 2 square stays in strip form. I store them in those flat 12x12 scrapbooking boxes. I do have shoebox size containers of 2, 2.5 and 3.5 square but prefer to keep strips. I always cut down to the largest size that I store. I used to do 1.5 strips but I'm finding I really don't use that size. Anything larger than a FQ stays as yardage. The trick is to cut the scraps after you finish each project or they get out of control. I confess that I don't always do that and just spent a week chopping and taming. Good luck, just take it slowly and do a little at a time.