If you've been knitting for awhile, you've probably collected quite a lot of yarn. Maybe even more than a lot. This is not a judgement, as those who live in glass houses surrounded on all sides by heaping piles of yarn can't throw stones.
It can be helpful to keep up with what yarn went in what project. Ravelry of course is a wonderful online tool for listing your projects with pics and the yarn and needles used. It can be quite helpful to know that the scarf you knit your sister 3 Christmases ago was made with Stitch Nation Bamboo Wool, for example.
If you prefer a real world option, my friend Shannon has a fun way of keeping her yarn labels organized, tucked in with a bit of yarn. This is both tangible and practical.
Grab yourself a pack of trading card binder pages and put the yarn label and a bit of the yarn in each pocket. (I think this would have been very helpful when I knit the "Tamara" wrap and used 11 different colors of Wool of the Andes, some of which were close in shade to one another. It's too late for that now, but I think future projects stand a much better chance of being more organized now.)
I know I have tried inserting the label into the yarn ball after a skein is wound, but they tend to fall out and congregate in the bottom of my knitting bag. Saving the labels this way is a great solution to that problem.
For an added layer of organization, you could jot a note to include in the pocket, detailing what the yarn was used for and how many skeins you purchased.
Even if all you do is put in the yarn label and a piece of yarn, you'll be able in the coming months or years to know that one yarn feels softer than another, and that one yellow is more buttery in person than your computer screen says it is, making this a truly useful, truly simple knitting tip.