I have a whole armoire dedicated to yarn and fabric storage. I also have been making a concerted effort lately to keep my stash small and knit only from stash. So far it's worked. It is necessary in a small space not to waste too much of it on storing things you never use. But, I mean, there's a whole piece of storage furniture in my apartment just for craft supplies, so I'm certainly not a model of space-efficiency.
But I think the real reason I can do it is because I'm single. I have space for an armoire full of yarn because I don't need two dressers in my bedroom. That's also why I have been able to sew so much this summer. Normally, when my apartment is clean, my dining area looks like this:
But for much of the summer, that whole table was covered with piles of fabric, a sewing machine, a cutting station, and a blocking/ironing board. I could never do that if there were someone else living here -- let alone kids around.
Lemons, lemonade. Frankly I'd rather be married with kids, but in the meantime, I can knit and sew a lot.