This is kind of hard to do as a mom who has to get other stuff done, but if you keep up with it, the effort is minimal and well worth it. If you do not keep up with it, it may take hours every once in a while, but keeping up with it will make it much easier!
The only stuff that should be HANGING in the closet or in the dressers is stuff that fits RIGHT NOW. It may not make sense as a mother, but the ability to know that everything in the closet fits is HUGE and makes many things much better.
The stuff that is a little too big and will fit soon should be in a container – I use a clear plastic thing – on the floor. When he needs clothes or we are ready for a change in sizes, you can either hang things a few at a time every time you are in there or if you do it all at once, it will take just a few minutes.
The stuff that is too small can go in another container – also a clear plastic one – on the floor. I do use the same container for things that are too small and too big because I am a little anal retentive and I like them to match. When stuff that no longer fits comes to your attention, you can just fold the stuff and throw it in the box. When the box gets full, you know to get a new one. If you get rid of stuff regularly, you can put the containers into which you want them to go permanently there instead. For example, if you give all your clothes that are outgrown to someone else and you give it to that person in garbage bags (my disposable container of choice!) then you can just put those on the floor instead of the containers and as your child outgrows something, you can just put things in there.
This works for any age child and makes sure that the seasonal clothing change is no big deal.