This is such a hard area to manage - the paper work. There are several organizing websites that address this and there is good info out there. This is what I do.
ALL tax records and any paper that will back up what I claimed are kept for 7 yrs in single file packets, 2005, 2004, 2003, etc. I keep medical info for about 2 yrs unless it's an ongoing, cronic condition. I figure if the Dr. and the insurance haven't billed me any thing additional in the 2 yrs I'm good to throw it away. I keep school awards/certificates/photos and the last report card of each yr for each child.
I have 12 hanging files, one for each month then added additional files for TO PAY, ACTIVITIES, each kid for school stuff and I recently added a PETS folder. All bills paid in May get put in the May file. Insurance stuff is broken down into auto, house, life, like the annual policy statements they send. I kept a file for the auto accident I had 2 yrs ago but I may shred that this year.
At the end of the year I go through the 12 month file folders to pick out what I need for taxes: donation receipts, child care receipts, etc. then shred the rest. I don't need the old visa bill from Dec. 2004 so it's shredded. I tried to make the whole system VERY easy and it works for me. I'd rather have the monthly filing quick and take about an hour once a yr to purge the whole thing. I have very few assests so I don't need a lot of catagories like stocks, bonds, properties, etc. Birth certs. ssn cards and shot records go in a fire proof lock box.
I lived in Japan 12 years ago and kept the rent book and a couple of train maps that I obviously don't need here in SW FL but I like having them so they have a seperate file. I've read that 90% of the paperwork we keep is never looked at again.
I hope I helped someone with this, paper work really needs to be customized by you so it makes sense to you. I found yrs ago that filing electric, mortgage, water and so on was too time consuming so I went to the monthly file system and it works for me.