I, too, have a very small sewing area. By the time I finish a project I have no room to start another so I have to fold and put all the fabric away. As I am cutting pieces, I put ALL my scraps in fresh bin -- that way if I need to recut a piece or a block I have the fabric (Sometimes I have had to sew the scraps together just to be able to recut a piece, but isn't that what our thrifty housewives grandmothers did?) Once the project is completely done (including sleeve and label) I will combine the scraps with the rest of my scraps.
Since my Rowenta Iron smoked, I put my iron on a power strip and turn it off when I am sewing or cutting.