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You can make a wonderful rag holder out of an old t-shirt. Find a large or x-large t-shirt that you are no longer using. Put the t-shirt on a sturdy hanger, then tie off or sew the bottom of the t-shirt. Hang the t-shirt in a convenient place and use the neck hole to deposit and retrieve rags.
I saw this tip on a gardening magazine somewhere, and it's original form was to store plastic bags. However, I have found it works excellently well when it comes to storing rags as well! With a few modifications. You can use one per room in the house that requires rags (bathroom, kitchen, garage, etc)
Presto! You have yourself an attractive, recycled, neat, semi-permanent rag holder. Decorate and display as you wish.
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By ahorrasi from Marshall, NC