My method is simple:
Pick up one thing. Ask yourself what category it is. Place it in a box, with the category clearly marked with a piece of paper. Pick up the next item and repeat. Clear out your space while sorting, one item at a time, everything into categories.
Now that all your items are sorted into categories it is easier to decide what you want to keep or donate. Go through each pile and try to get rid of as much as possible. I must admit I didn't get rid of much!
Now that you have the things you love, use and want to keep you have to decide where everything will live.Mine live in the closet.
I print two labels for each box. Labeling both sides makes finding the right thing so much easier.