Pillow Memento: Give those precious outgrown baby buntings, blankets, and bodysuits a new function as decorative pillows. For clothing, take a shirt, dress, bunting, or romper and fold the arms to the back or just stitch them closed and hand stitch to secure them in place. Sew closed all openings, but one for stuffing. Stuff with pillow stuffing and sew the remaining hole closed. An extra touch would be to embroider the date, age of the child, and the occasion of the outfit onto the pillow before it is sewn.
Baby blankets easily lend themselves to being transformed into pillows. Big ones can even become bolsters or neck rolls by using pieces of thin foam rolled, rather than stuffing. These work great for a toddler's new "big kid" bed.
Clothing Quilt: Another way to reuse outgrown clothing is to create a wonderful memory quilt from the fabric. For this project you should use a full sampling of outfits from everyday bodysuits to fancy dresses, making sure all the pieces will be comfortable to sleep with if the quilt will be used in bed.
Cut the selected outfits into squares that are all the same size (example four inches by four inches). Cut out extra for fabrics that need to be reinforced with a backing. Fold under a small border and stitch these pieces to the backing squares. Measure, adding extra for borders, how much fabric you will need for the desired size. Next, sew all the squares together. Add a backing of fleece or some other fabric. You can either use the quilt as a duvet and stuff a comforter inside or just sew the backing completely onto the quilt.
Framed Clothing: A simple yet elegant way to archive baby memories is by framing items using matte board and a decorative frame. Consider framing first clothes, a baby cap, booties, cloth diapers (clean ones, of course!) or a tiny favorite outfit. A line of three pictures all with the same frames and matting looks especially nice. You could even include one picture with several pieces, such as an announcement, first photo, and bodysuit.
Use an extra piece of matting which you can custom cut to the size of each piece for a backing with added interest. Choose matting colors that accent the pieces, like a deep cherry for a baby blue bunting or rich moss green to accentuate a pretty pink dress.