Most of the homes you see in magazines are probably at least three times the size of our 50's rambler. I actually have no problem with the size of our home, though a basement or a garage would be great for storage, but it would be nice to find more inspiration for small (and probably the average size) homes. I did find some examples, which I've included below to help you embrace your small space:
Keeping your space uncluttered and making the most of your light source is a great way to start - mirrors do amazing things!
via Fresh Home
This space is a little too cottagey for me, but I love the built in bookcase, which adds vertical storage, a commandment of working with a small space.
via Decoholic
Notice a trend? Mirrors, light, and order.
via My Home Ideas
My amazing husband turned our dining room, kitchen, and living room into a gorgeous open concept area, similar to the one above. Like ours, this great room isn't the size of a gymnasium, but it's functional and beautiful.
via HGTV
Painting a wall in an accent color helps push walls back.
via Sunset
Another issue those of us with smaller homes run into is that furniture is so big! It can be a little bit harder to find furnishings for small rooms, but scale is really important, so it's worth the effort!
via Home Edit