When dead soft-bodied insects are placed in a liquid, enzyme activity will cause discolouration and shrinkage unless there is something in the liquid preservative that destroys the enzyme. Professional entomologists might use phenylthiocarbamide for this purpose, or glacial acetic acid.
For larvae, a solution comprising 77% ethanol (or isopropanol), 16% glacial acetic acid, and 7% kerosene is a recommended fixative.
Alternatively, 60% ethanol, 10% glacial acetic acid and 30% chloroform will work quite well too.
For very softbodied insects, halve the amount of kerosene or chloroform.
Do not add formalin (or formaldehyde) to the solution as it will cause hardening of the specimens and make them brittle.
These mixtures are used to fix the creatures - place them in the solution for a few hours to acheive complete penetration and then store them in 80% ethanol.
If you can't get those chemicals, a cheap and dirty method is to destroy the enzyme by using very hot water (just below boiling), but this might also damage the specimen. Then once it has cooled you can place it in ethanol.
The only way to keep softbodied insects is in liquid - if allowed to dry out they will be easily destroyed. So keep them in a vial, test-tube or jar. Maybe a Petri dish that is glued shut, or as someone else has already suggested, in a resin paperweight.
Just remember - alcohol removes water from the specimens, that's why it also causes shrinkage.
Check out the books below, if you can find them they will be a great help to you.
Hope this helps.
Hix
Sources:
Upton, M.S., and Norris, K.R., 1980,
The Collection and Preservation of Insects and other terrestrial arthropods, 3rd ed., The Australian Entomological Society Inc., Brisbane.
Smithers, C., 1981,
The Handbook of Insect Collecting, Angus and Robertson Publishers, Sydney.