You need to set up a message center, a specific place for papers to land so they're not all over the kitchen countertop or table. To set up an effective message center, figure out if you are a "piler" or a "filer." If you are a filer, set up some kind of upright filing system so that papers immediately have a home that is easy to access. If you are a piler, you need a lateral filing system that is horizontal, like letter trays.
Then you need to keep papers in categories – but just a few categories, and keep them broad. There is often an action attached to each paper, so that action can actually become the category. For example, "to pay" would be a category where the bills go, then after you've paid them, you can move them to the "paid" file. You can also create categories like "things to read," "kids' papers," etc.
And don't forget to clear the trays out. The end of the year, when you're preparing to do your taxes, is a really good time to move your bills into an archive filing system.