I will share what I have learned and you can see what applies to you. Start with the end in mind and aim to overcome the worst problem that you have actually had, be it the getting the stuff put away or retrieving it when needed, Use your files as a method for storing reference material, not a memory jogger. If you need memory joggers, and I do, create lists for that and file them under LISTS or MEMORY JOGGERS or whatever works for you. LISTS works great for me. So for me, I have separate files for different credit cards (labelled Visa, MasterCharge, etc.) because I need to get those in a file to get them off my desks and I have a file labelled credit matters that has a list of account numbers and related information and in LISTS I have a list of acct numbers. As to the hanging type. I find they fall off their little tracks and get over stuffed so they need a lot of TLC but they are great as place holders for a file that often gets taken out and must go back in its assigned slot , especially if in use by different people. You might look at the GTD book for issues about the types of folders. Just keep asking yourself what is the easiest way for me to retrieve, replace, update and file--people's minds work different ways. Different usages require different methods, too. For example at my foot doctor patients with different ages, diagnoses and insurance plans file out different forms and take home different information (patient hand outs)--no two patients are alike . The front desk lady has a file drawer of hanging folders for these forms and they are alphabetized A to Z, e.g. Alpha Omega Insurance Report, Bone Spur Pain Rating Scale, Callus Removal Home Care, Decadent Medical Ins. Group Report, etc. These hanging folders only hold the blank forms from which she selects specific ones to give to different patients. The only thing that ever goes in these hanging folders are the blanks themselves so this is really used as a "retrieve mainly" system. If they add a new form she just adds a hanging folder with a label and puts it where it goes in the alphabet. Systems works great. But if you are doing a lot of in and out with a regular file inside of a hanging folder you might get frustrated. Another use I like for the hanger ones is when ones needs a "catch mainly" system". I have a cooking file drawer and in that only I use hanging type files. I based the file heads on the table of contents of a major reference cookbook so that when I get recipe clippings I can easily put them in the categories that follow that outline. I rarely take anything out of this file but when I do, I want only a certain topic and then I want it completely. There are no folders in the hanging folders--I just take the whole hanging thing out that I want to pursue (e.g. BREAD). You see as an every day matter I do not cook from recipes but I collect recipes and then every so often (like 1 ro 2x a year) I boil them down to a master recipe or set of master recipes for a given item. So ask yourself: what do I need to make easiest--collecting, retrieving, both and fhow can I do so in this case? What are my choices and whart am I maximizing? Again, I urge you to read in detail the GTD book sections on filing and it has helped me foresee pitfalls to write a description of what I am doing and "instructions" for myself. Good luck! Let us know how you make out--you might disciver something useful for others.