I've separated my albums and CDs into two broad categories, Jazz/Blues and then everything else (Soul, R&B, and soft Rock). I sort them by the first letter of the artist or group name. I have about 1,200 albums - some of which I don't listen to much or not at all anymore.
I store the ones I listen to the most (about 400) on wooden album racks in my basement listening room. The rest I store in plastic album holders that I bought back in the 70's and 80's, when I was growing my collection. For easy access, I place those on home depot storage shelves in my basement utility room.
I keep two of the plastic holders in my listening room to hold music that I rotate in and out of "bulk" storage.