First, you should pick an interior design theme which appeals to you but which will also add appeal to a tiny space. Having a good amount of clutter in the living room will make the place feel smaller so avoid decorating themes that clutter up the room.
Keep control of storage. If you accept that your living room will attract clutter then plan for it. Oak or pine cupboards and sideboards will give you the space to tidy up after the children have finished playing and allow the adults a tidier area to relax in when evening comes.
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Color Coordination. The most important tip one must keep in mind while decorating their living room is to coordinate the color of your furniture with the hues on your walls. You need to add a little creative effort decide what will look good with which color. For example, the lighter hues of green go very well with white. This turns out to be a bright and soothing combination.
The important thing to remember in furnishing smaller living areas is produce an area that is cozy and beautiful and yet easily doubles as a very functional part of the house which can serve a multi-purpose role. Cluttering the living room is a bad idea so you need to be clever about your furniture choice and go only for those that serve at least a dual purpose. Sofa beds, futon sets, sectional couches come in mind when you want such furniture.
Curtains. This is the most important part of furnishing. In this also comes the window treatments. Consider the wall and furniture color along with amount of Sunlight before buying curtains. Pick the bold color and floral pattern if you have picked the contemporary theme. You can go with the plain curtains with tassel and other accessories if the theme is traditional. The fabric of the curtain markedly affects the appearance. Pick light fabric if your room is small and has less light.