So! I have had that issue before, and honestly its tedious, but here are a few ideas that helped me
1: give your villagers your items you dont use!
Theres a very low chance that they'll not like what you give them, and it will gain friendship and further you for a photo! I was looking through my storage, found a bottle ship, didnt know what to do with it, gave it to Bruce who turned out to really love it
"Oh a set of dinner ware, Im not really fishing, or close to making a kitchen, but you know who would teally like this! Lopez!"
I gave Marshal a coffee grinder, and he gave me his photo
So you give them an item, and they'll take it. Great minor way to raise friendship with your villagers too
Plus they do the same, and sometimes gift you things they dont use, and say you can sell it. So dont feel guilty about selling it.
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2: Think hard if your really gonna use this item
Works great for clothes, and something that helps. While your going through clothes, think hard if your gonna ever use it. Like if you see a silk top, that youdont really use, if you dont well you could probably sell it, or give it away
"I really like this top, but never use it" maybe sell it so you can make room for clothes, or items you would wear. Another tip that worked for me, but only works if you have a wand. Make wand outfits, because then the clothes are no longer in your storage. Which is what I use, though I barely change my outfit. I do have several other outfits registered, and they don't take up space now.
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3: you can re-buy it
Its handy, because if you later need, or want an item you got rid of, you can purchase it again for the selling price. I honestly recommend keeping the expensive that you wanna use, but smaller items, or cheap items you can just buy back.
So if you get rid of a Paper Tiger, and regreted it, you can always buy it again. Which is pretty handy to know, and you can get it in the exact color too.
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Maybe these tips will help you
Storage can be a real challenge, but keeping those in mimd, might help you!