Up until this past year I've always tried to support my LYS with my custom, and didn't know about the variety of yarn bargains online. This year, after several frustrating incidents with my favorite local stores either not stocking the yarn I needed or flat out refusing to special order, I started looking elsewhere.
My favorite LYS' in Maine have online capability, but thanks to talking with folks here my eyes have been opened to a wider range of bargain yarns (those dastardly banner ads are working, Amy!) & I now count them among my favorite places to shop.
My reason for only purchasing per-project right now, is that I have a lot of stash yarn, some of it "handmedown" - someone else was clearing out and thought I'd like it. I have limited space where I live for my stash, so I'm trying to now evaluate what do I have, what do I want to hang on to and use, and what do I need to rehome in order to make better use of my yarn cabinet. Right now I have yarn in excess of the cabinet's capacity taking over a portion of our enclosed front porch, which we have been using as a storage area. I'd actually like to be able to sit out there of a summer and knit in the evenings at a little cafe table - but as now, there's no room. I need to have a yard sale and I need to hold an adoption ceremony for some of these yarns that I've been unable to find a purpose for.
Darn my frugal Yankee pack-rat mentality!