I leave my scraps alone until I know what I want to do. They're a mess, but I can find the size I need at the time.

Somewhere I saw a "magic"formula for cutting scraps. All the pieces fit together, like two 2 1\2" squares would fit with a 4 1\2" square, which would go with a rectangle cut just the correct size, and half square triangles, or hour glass bocks also cut the correct size... I should have copied it all down when I saw it, but alas, I did not. I thought it would be a great system for cutting scraps! Anyone know about that?

Judie, I believe the system you are thinking of is by Anne Wiens. She has two size sets of scraps which play nicely.
Each set deals with squares and rectangles. If you have Facebook, go to Thrifty Quilters. Anne has a terrific book explaining the system and lots of illustrations for blocks, sashing, borders, etc.

I know that after 20+ years of quilting, I had scraps beyond what I needed or wished to have. I posted them on QuiltingBoard for the cost of postage. Not only did I feel relieved, but the recipients were so grateful that it was like Christmas! It is more blessed to give than to receive!

I tend to put all of my scraps into a basket until it's over-flowing, then start cutting them up for a project. I've got one scrappy quilt pattern that I've made twice and it needed a lot of 4 patches that finish at 3". Whenever I have really small scraps, I cut those into 2" squares and put them into a zip lock bag. When that bag gets full, I turn them in to 4 patches. When my stack of 4 patches get big enough, I can make another scrappy quilt!

I hate cutting any larger pieces down without a project in mind. One of the quilt tutorials I've watched suggested cutting your scraps into strips instead of squares. That way you can decide at a later point if you need squares or rectangles for a project and cut the pieces down farther. Think of the most common sizes that you tend to use. Sort your strips by width and keep them in a labeled plastic shoebox. If you've got a bunch of 2-1/2" strips, you can cut them down into squares, rectangles, sashing, binding or whatever else you may need.

I'm afraid if I store mine by color, I will have more bins and more scraps!! I already feel like they are multiplying, I've been making quilts from my scraps lately, but I can't tell which one of us is winning. lol

Scraps are both a blessing and a curse. I have cut squares of all sizes until I had boxes of them. And yes, it creates pressure to sew them up and when they are scrappy it is more difficult to make them coordinate with anything. So then I started cutting strips when I could but it creates the same problem for me--the challenge of how to use them. My third phase of scrap control is simple. Use it up! I am determined to use up my scrap stash in any way I can so I can feel free to begin new projects with fabric I want and not feel I need to use only out of my stash. My scraps have become a burden to me and a boon for the Comfort Quilt business! Last year I made about 50 of them to give to our Guild's collection.