As someone who has run many, many home games, including cash and tournaments, also consider how easy it is to stack a fresh buy-in. Having 6 of one color, 5 of another, 3 of another, 8 of the next... Yuck. Many ways to make a mistake. If I'm doing a tournament where the starting small blind is 25, then I'm going to ALWAYS use:

    8 qty 25 chips = 200
    8 qty 100 chips = 800
    4 qty 500 chips = 2000
    N qty 1000 chips = N000, where N controls how much the starting stack is.

When I'm preparing a bunch of new stacks, I mostly just have to deal with stacks 4 or 8 high, which can be measured next to each other in under a second. Also, the first two colors add up to 1000 exactly, and the first three colors add up to 3000 exactly, simplifying the math. Also, standard chip racks hold stacks of 20 chips, so the first three colors can be pre-built and stored in the racks. If I'm doing a cash game, with $0.25/$0.50 blinds, I use the same formula as above, but divide by 100. Just as easy.

For a $1/$2 cash game, I'm going to ALWAYS use:

    20 qty $1 chips = $20, for blinds
    N qty $5 chips for the rest of the buy-in

And that's it. Since again, standard chip racks hold stacks of 20 chips, these can be set up in seconds. Later in the game, we can break out the $25 chips.

Also +1 to using "standard" casino chip colors. In the US, $1 is almost always white, $5 is almost always red, $25 is almost always green, $100 is almost always black, and so on. Don't confuse people.

Buy your chip set based on how you allocate your chips when playing, don't allocate your chips based on whatever chip set you happen to have.