I first bought a plastic bin for each one of the kids and put their name on it. When the kids come home with papers, I sort through them and decide which ones I like or are special and which ones are not. I then put the papers I want to keep in the bin face side down. I continue this throughout the year. It is not realistic to keep every paper that comes home. I just keep the ones that are their best work, show their handwriting, artwork, handprints, etc.
At the end of the year, I will have a bin full of papers (all face down) with the first week of schoolwork being in the bottom of the bin and the end of the year papers are in the top of the bin. I reach into the bin, grab the whole stack of papers and merely flip the whole stack over so the papers are now facing up. When I do this, the first week of school papers are now on the top, facing up, and all of the papers are automatically in chronological order. Now, I am on to the next step.
Step One: I bought lots of spiral bound, 10x10 scrapbooks at Walmart, and they were only about $6 each. I have also seen similar books at JoAnn or Micheals. They have a black cover and 40 pages of white, acid-free, heavy weight paper. They kind of remind me of the old scrapbooks with the black pages.