It is always best to have a plan when trying to design a smaller living space. You have to be especially mindful of your space. In order to deal with your space issues, consider checking out multi-function pieces that also play with scale and proportions. When combined with proper lighting, these pieces are accented and it creates a larger feel to the room.
If you love color, be sure not to over do it. Color is great in a space, but too much of it can make a room look small, cramped and busy. It is also more difficult to change a room that is full of color to a different look.
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