I mean, every knitter needs a good working stash, but when it becomes a storage issue, and maybe even a bit of a guilt issue, too, it's time to step back, stop buying, and take a look at what's already there. Some of it is pretty fabulous.
It is hard, because I enjoy the yarn-selection and the yarn-purchase phases of a project as much as actually knitting it. I love choosing yarn, sending off for yarn, waiting for yarn, and finding a box of yarn on the doorstep. So much so that sometimes I skip the step of actually knitting with yarn before starting the whole process over again.
My best ally in keeping the stash in check has been Fishermen's Wool from Lion Brand, and Koolaid. Dyeing yarn whatever custom color(s) you want and only in the amounts you need is a great way to avoid both new purchases and tons of leftovers. There's a long thread on Koolaid dyeing on Craftster here and a great article on Knitty here.