Moth balls aren't too good. They kill the bugs, but can cause health problems in people and animals who have to live near them. Go for cedar! It smells good. You don't have to have a whole cedar chest (although they're pretty). A tight-lidded box with cedar chips will do. Look in the pet aisle of your Wal-Mart or K-Mart or whatever. Almost all of them have bags of compressed cedar chips for a couple of dollars (or six bucks for a REALLY HUGE bag that will fill a large doghouse several times.) You can get cedar blocks in the laundry aisle of most stores, but they cost more and don't last any longer.
One thing that works well to keep the cedar scent in the air and the chips out of your yarn: lay the chips in the bottom of the box, lay plastic canvas over them, and put your yarn on that. Cedar essential oil shows up every now and then. That's really easy because you canm spray a piece of cloth and leave it in the container, or spritz cedar chips that have started to lose their scent.
Lavender chases away moths, too, and it smells sooooo good. You can buy lavender essential oil or bags of lavender blossoms. They make SUCH pretty sachets...
Make sure to not let the fabric or yarn touch the cedar. Eventually cedar will compromise the fibers. Wrap the clothing or yarn or wool in tissue paper or put in cotton pillow cases, etc., to protect it from the cedar. Here's some recipes for sachets.
Making sure your stuff is clean is the first big step. Larvae don't eat wool, they eat food on the wool. So wash everything before you store it away.