Abstract: A liquid storage system involving a variable container concept for storing fresh water and grey water produced by the use of the fresh water is provided. Obviously, other liquids can be handled by this system, either in a recreational vehicle, tank trailer, or dispenser applications. The system includes a hard sided tank containing at least two soft-sided tanks therein. The first soft-sided tank contains fresh water and is connected to the faucet of a sink of a recreational vehicle or the like. The second soft-sided tank is connected to the sink's drain so that it may receive and hold grey water produced from the use of the fresh water. With the fresh liquid tank initially filled and the grey liquid tank initially empty, the system provides for storage of both fresh and grey liquid in the space required for storage of the initial volume of the fresh liquid.