You guys are doing great!
I've recycled for about twelve years now i think, since before there was a city-wide recycling program. Unfortunately there are some things the city won't recycle, and i just learned they are going to quit recycling glass because they can't sell it for enough to pay for the cost of processing it.
I got myself a good compost bin about ten years ago. It's black and has a hatch at the bottom. I read somewhere that 40% of our household trash is biodegradeable. I've found you can't put absolutely everything in... nut shells don't break down well, even peanut shells, though they do aerate the soil. I keep sticks out. Citrus rind breaks down well. I keep finding bits of plastic in the compost i didn't know was going in, like those little stickers they put on fruit. But it does make nutrient rich soil that i can put around the garden... all for free, of course.
Our city will only accept newspaper. There is a school nearby though that accepts office paper, and uses it as a fundraiser for the school. But that leaves the slick paper from junk mail, magazines, and newspaper inserts, and paper wrappers, and there is a lot of that. So i've been contemplating making a papermaking screen. I used to make paper years ago. It's fun, and then you can use the paper for art projects or stationery.
Looking at my trash, another large portion of it is clothes that are too worn to be given to charity. So i would like to start making crafts with them, like perhaps rug hooking.