K.N.
You are wise to get a plan together now because, as you said, there is much more to come.
This is what I've done and it works very well for me. I have 4 kids so I got a 4-drawer file cabinet.
At the beginning of each school year, I label a folder for Sept-Aug. I drop in what I really need to keep; report cards, art projects, swimming lesson certificates, etc. When choosing which art projects and school papers to keep, I look for the ones that showed either their creativity or an example of something new that their learning. I throw art projects that are the "cut on the line and glue together" types. I keep papers that showed how they wrote their name at that point, their first addition paper, etc. Consider what to keep by what value they will put on it in 20 years when they're looking back.
Here is an "I wish I would have" idea: each year, have them (or you, if they're too young) fill out a paper with their name, a list of their friends, what they like to do for fun, their favorite color, game, sport, TV show, etc. Then drop it in their folder for the year.