Here is a tip that has helped my sanity and has also helped bring order to my children's closets.
Find two gift bags that you have stashed away in your gift wraping box (we save them and recycle them when we give gifts).
Bag number one will be used for the clothes that no longer fit your child. At a later time you can store those 'too small' clothes in the appropriate long term storage bin in the basement.
Bag number two will be for the clothes that you know you do not want to keep. We get lots of hand-me-downs from my sister and sometimes you don't know if it is a keeper until you try it on. I put items in this bag that just don't seem to sit right, items that seem uncomfortable or items that may be stained or just is not your style. At a later time, you can take that bag to the basement and toss it in your Good Will box or Garage Sale box.
How to hang it.... use one hanger on each handle of the bag and hang in the closet so the bag stays open all the time for quick and easy deposits!
This little trick has worked wonders for my peace of mind. Now we have no loose items lingering and it minimizes the clutter in the closet.