I do applique and always am looking for something for my projects. I have clear storage containers for different colors, red, blue, green, etc. Then, when I'm working on a project, I pull what I want and use it. I have a pretty big collection.
I don't cut into smaller strips or squares because I don't know what I'll want to use or what size it should be. And, I have a quilting friend that uses small scraps for dog bed fillers so if I decide I don't like some fabric and will never use it, I give it to her.