Gather decorations that match the color scheme and theme around which you want to focus your holiday decor. The decor doesn't have to match your living room's, but should at least reflect a complementary palette and style. For example, include rustic Christmas decorations if your living room is decorated with a rustic style. Opt for a warm color palette such as gold, red and green if your decor is warm. Use silver and blue or purple if your color palette is cool.
Remove any unnecessary decor or furniture. For example, if you have two end tables in your living room that you don't typically use, store one of them in the basement, attic or another room until after the holiday.
Set up your Christmas tree to serve as the focal point of your holiday decor. Place the tree in the first corner you see upon entering the room, or center it in front of the largest window. String lights, garland or tinsel and hang a few ornaments on the tree. Avoid stuffing the tree full of decorations. This can detract from the tree's charm and create an overwhelming, chaotic look.
Use a miniature Christmas tree, if necessary, on a tabletop or tucked in a corner by the sofa. If that isn't compact enough, consider a thin tree made of feathers, pinecones, candy or other compact materials. Include a decorative tree skirt if you have one.
Decorate your fireplace mantel as the centerpiece of your holiday decor if you don't have room for a tree. Keep the decorations simple and compact, such as slim candleholders and candles. Add some greenery, such as a wreath or swag. Other alternatives in lieu of a tree or mantel are to hang a festive wreath with a few ornaments and to decorate your houseplants with ribbons.
Accessorize the room. Use candy canes, small decoration collections such as snowmen, Santa Claus scenes and nativity scenes, and Christmas-themed candles or decorative plates. Fill jars or baskets with ornaments, Christmas candy, pinecones, evergreen sprigs or other decorations. Toss Christmas-themed pillows or throws on the sofa or chairs.