Cindy,
We are only a family of three, but our son (9) was using towels at an amazing pace. So, we had him pick out his own towel and wash cloth from the store. Now he only uses his own colored towel and wash cloth and the pile of towels I need to wash each week is down to one load instead of two. His towel is usually washed twice a week. Once on Tuesdays when it is his day to wash his clothes and then later in the week, usually Saturdays, when I wash all the towels in the house.
If your family wants clean towels more often, then maybe you could get them two towels and wash cloths each. Each member of the family could pick out their favorite color of towel and would then only use those towels for the week. For example, my husband uses the white towels, I use the burgundy ones, and our son uses the orange towels he picked out himself.
Good luck conquering the towel mountain.
C. J.