When you do move the new baby into the toddler’s small room, think "up," as in a plate shelf along all four walls for storing stuffed animals and breakable figurines, hooks on the walls, and over-the-door shoe bags (see www.stacksandstacks.com) for toys, socks, hair doodads and other compact kid stuff.

Try to hang onto as much floor space as possible, with double-duty furniture like low storage benches (with a safety latch), under-crib boxes, and a tall armoire if your closet's not big enough. As for the closet, install double rods since kids' clothes are so tiny you can easily get two rows (even three). Elfa closet systems with sliding baskets save space and make it easy to switch clothes by season; check out www.containerstore.com.

Try to give your toddler a little place of her own in the room, maybe with a small round rug and a low basket of books; www.ikea.com has cute, cheap things.  And don't be too quick to move her to a big-kid bed; see if you can borrow a crib (in good condition) for your baby. It's hard enough having to share your space with a squalling, stinky intruder, but having to give up your bedtime haven too?