The biggest enemy of physical file storage systems is and will always be volume. People always talk about defining categories as key, but even with the most unambiguous category definitions, if there are still so many files in each category, it's still going to take long to find a file. People always talk about efficient and easy-to-do sorting as key to file storage, but even if you can quickly go through a pile of 500 documents and sort them, you're still going to end up with 500 documents. Hence, I believe that time-based disposal is a key element of a successful file storage system.
The success of letting go of the unnecessary
The key goal is simple: at any point in time, a file storage should only contain documents that are currently necessary or will be needed in the future. Without this as part of your goals, the volume of your file system will constantly grow at a perilous pace. In other words, it is a great success if you can dispose of a document that will not be needed. It is space made available for important documents, it is less stress to be burdened with. If I may add, there's a deep satisfaction in the clean, simple and necessary.
Not so easy to determine
I know what you're thinking, the crucible is determining what files are no longer necessary. You're up against one psychological fear: loss. It's certainly bad to have never had a document that is needed, it's far worse to have had that necessary document, but had thrown it away. That would certainly make one feel stupid.
Time as the critical deciding factor
If there's one thing that can help us with this though, it's that everything gets obsolete. Obviously not to be taken to the extreme, but one more-right-than-wrong principle is that the older a document is, the likely is it to become obsolete. Those bank statements may be important this year so you can trace spending, but 10 years from now, where a lot more significant-to-the-present transactions have transpired, those 10-year-ago transactions aren't going to be as important. Plus the fact that it becomes harder and harder for us humans to go back to, and to deal with the past, and we'd rather not do so with the choice. Plus the fact that both law and the finance suggest keeping documents for 7 years.
Intentionally Make Documents Obsolete
We'll take another discussion on how to do this, but we should always be finish processing documents to the extent of their usefulness. For example, bank statements becomes instantly obsolete if you have accepted all transactions (there's no longer anything you can do with them) to the current balance. Even if you need historical data, summarize your annual spending into a report, and you'll no longer need the details. And obviously know when documents should never be thrown away: obviously documents like land titles, birth certificates, etc.
Group documents that should be thrown away by their disposal year
Getting to the final point of our suggestion, batch documents by the year by which they should be disposed. This let's you deal with the document themselves and pass final judgement on them, and yet still allow us to keep them just-in-case. Our system: we generally keep documents for 10 years. At the end of the year, I will open up an envelope and label it for example, "2024 Batch | To be disposed January 1, 2035". I will then take all documents that fall under this, take them away from my working file system, and archive them. This way my working file systems remains lean and essential, I can still go back to this envelope just in case I need something from it, and I know that at some point, I will dispose of it.