Headphones have a magic way of tangling themselves in inexplicably complicated knots. Many techniques for keeping headphones tangle-free work but they badly kink and over tighten them in the process. Use an over-under wrap for easy and cord-friendly storage.
Over at HackCollege they tested out a bunch of different cord-wrapping techniques with the goal of finding a technique that was easy to use, didn't impart kinks or curls to the headphone cord, stress the headphone jack, or require any fancy undoing to return the headphones to their natural state. They ended up using an over-under wrap held in place with a simple twist tie. Watch the video below to see it in action—you can jump to around the 1 minute mark to skip the intro and get right into the technique.