At this age you should just ask for favorite colors, and then you pick the complimentary covers. Real privacy demand won't happen until about 11 - 13, so right now just concentrate on making it beautiful. If it is pretty and functional, they will love it! Buy furniture pairs so when you do split them up they each have basics. Advice about dividing the room generally is good, but you don't want big sister declaring any territory! There is a crown detail you can do over a bed that includes curtains down on either side - can provide privacy when you sit up in your own bed - consider this as they get a little older and won't pull it down while hijinxing. If it is beautiful and the textiles are in a color they love (or two colors that work together, like pink and lavender on a spring green or taupe wall &/or turquoise and spring green on a buttercream yellow wall ) - then they will see that they can also be different people who are harmonious together. At 7, she is old enough to pick a great color, but don't ask the 5 year old - her taste is changing daily - just surprise her with something all her own that works with sister's pick. I like the look when people select soft goods that match except for color and find one great print accent pillow that ties colors together for both beds. Stay with neutrals on furniture - you can paint out different stuff so it is tied together with pale gray paint. Think mostly about function - Add shelves and cubbies that hold baskets for stuff - stuff changes but they always have it. If you have room, give them each a desk as they approach 5th grade.

I think I would start with the furniture, in terms of space, given that you said it was not a large room. I would check sizing of the furniture and room, to see what would work with the bed, a couch, the wardrobe and any other furniture that you'll be using in the room. From there, I think I would start with the bedding possibly as a starting point for the color scheme. Perhaps you could find bedding with a print you like in the colors that you like, and take from there, the colors for the rest of the room. As well as a sofa bed, another option might be a daybed that could also do double duty as a bed or seating. I think painting the furniture a bring pink would work well against the white. And then take it from there with whatever you've decided to do in terms of the overall color scheme with pink/white/silver/black or pink/orange and white for the walls, perhaps something like a gray as well with the second color combo. Good luck!

OK - I'm a beginner here on Houzz so my opinion isn't worth a lot but here it is: the room is a bit bland and lacking in character. I think you have to find some pieces you really love to bring it alive. All the suggestions are good for widening your horizons, but ultimately, you need to find things that matter to you, because it's your home and not a magazine photoshoot. That said, if it were me, I'd throw a couple of small, colorful rugs down, and put either one large painting or three smaller ones over the bed - not in a line but at different heights - to break up the binary look. I'd also put something on the wall above the heater. Then, play around with a few cushions and maybe a quilt that picks up some of the colours in your artwork.

Any suggestion will b great.