Evaluate your room:

If you have a choice, think about the colours of the walls.  Bright or light coloured walls may make the room feel more cheery.  Even if you don't have a choice you can still set the atmosphere by using banners, posters and pictures.  

These silk screen paintings were really easy to make.  The silk I bought online but everything else came from Spotlight.  
Large wall hangings can be made by sewing fabric together or using sheeting.  The blue wall hanging was made using house paint on cotton sheeting.  The sanctuary hanging was made by sewing together gold satin with sheer maroon over blue satin.  The Jesus and children hanging was made by sewing the blue and green satin together.  I used a projector to trace the picture on, and then after Sabbath School each week the children would glue squares of coloured fabric on to make the picture.

Pinboards provide an easy way to hang pictures and artwork and may also be painted to add colour to the room.  Pinboards or walls may be painted with magnetic paint, allowing magnets to stick to them, chalk board paint or chalk board fabric, or cover them in felt to create a felt picture board.

Dolls and doll sized furniture can be used to create both modern and Bible time indoor scenes.

Artificial plants and flowers and stuffed toy animals can be used to create nature scenes.  Use blue satin to create rivers or ponds.  Stars in the night sky can be created by inserting christmas lights into black satin.  Add to a heavenly scene with a background of icicle christmas lights in white organza; adding birds, bees and butterflies between the lights gives a great effect..

Coloured mats, tablecloths and other accessories can also be used to add colour to the room.