Just because a living room is small does not mean that it's useless. There are design and decor tricks you can use to create an illusion of space. Avoid filling the small space with clutter. This is not the space to display your knickknacks. Get as many items off the floor as possible. One of the secrets is to have a clear floor space.
Use light colors to help create the illusion of a larger room. There is a great variety of pastels, neutrals and whites to choose from. Pick a base color and work off that color with different shades. Pick out furniture in a solid color, not patterned. If the walls are pink, pick a different shade of pink for the furniture. The rug should be the same base color, but a different shade. Paint the ceiling the same color as the walls. This helps pull the room together and eliminates dramatic lines. Avoid using dark colors or patterned wallpaper. You want the small room to look light and airy, not like a dark, gloomy cave.
Light is an important element when opening up a room. Spot-lighting in corners helps chase the shadows away. Floor lamps that resemble torch lights have a directional light shade built in. This points the light to the ceiling, where the light bounces back down into the room. Keep the windows uncluttered to let in as much natural lighting as possible.
Choose accessories carefully. Add a large wall mirror to reflect the light and color in the room. It creates the look of a large space. You also could tile a wall with mirrors for the same effect. One large, bright painting is better than a group of smaller ones. The small paintings will amplify the enclosed feeling by adding clutter. Keep the furniture small and position it close to the walls. Try a love seat and a couple of small chairs in the same color as the walls or rug. This is not the space for a couch and over-stuffed chairs. Choose glass tables; this lets you see the floor under the table and maintains the illusion of an open space. Consider adding a built-in, floor-to-ceiling bookcase. This requires little floor space while utilizing a lot of useful space. Organize every item on the bookcase to keep the room uncluttered.