"FLEXIBILITY AND creativity" are two ways to overcome tight space and money in home decorating, Eileen Deymier recently told a Woodward & Lothrop Home Workshop seminar.

"The house of the '80s is small," observed Deymier of Better Homes and Gardens. "More and more of us live in town houses, condominiums and apartments. Furniture and rooms with multiple uses are the key: living rooms with a home office concealed by a screen, dining areas that double as a sewing or music room, dens that can become guest rooms."

The seminar also included Wayne Breeden, interior design director at Woodie's, and Carol Alan of Weyerhauser Paneling.

"Even though a furniture design looks terrific in a model room, you don't have to buy the entire set," Deymier pointed out. "The sofa can still look fine without that particular coffee table or those particular end tables. It's up to you to work out an original design, a design that's 'you.' "

"Having a flexible attitude toward one's purchases is essential," said Deymier. "Wicker furniture does not have to be used only on the front porch, what about the living room?"

Storage units that double as room dividers, tables and chests were some of the most common ways Deymier suggested using small spaces creatively.

Design ideas:

"Stacking modular plastic units against the wall of a dining room makes a wonderful china closet," said Deymier. Custom-made storage units are also available but are more expensive.

In the children's room, Deymier suggested building a raised platform in one corner for the play area. In small attic rooms -- often the space to where children are banished -- Deymier recommended a desk be built under a sloping window. Attic rooms ( or any room) with odd niches are a natural space to turn into shelves or a built-in wall unit.

One way to deal with small master bedrooms, suggested Deymier, is to avoid using the walls. "Everyone thinks the rules say you have to anchor your furniture to the wall. I don't know who wrote--the 'rules' but this is nonsense. Why not try floating your bed in the middle of the room with a storage unit at the foot of the bed. On top of the unit you can put your stereo and TV. A bookcase can be placed at the head of the bed, forming a useful headboard."

Small bedrooms can also be helped by placing the mattress on top of modular plastic drawer units. The units form the bed platform and provide drawer space. The units can also be stacked to form a matching chest of drawers.

A square room can be made less boring by floating the sofa, parallel with one corner of the room. "This frees up the room," said Deymier. "Whatever's left over -- the coffee table, side chairs and end tables -- can fit in just about anywhere."

A common solution to the much needed guest room is a converted den or television room. Deymier recommended purchasing two single beds on box springs without a frame, placed at perpendicular angles to each other. Big, colorful pillows decorate the beds by day, but when guests drop in for the night, you have an instant guest room.

Single rooms can be broken up into living and sleeping areas or a living room and home office with the help of tall, free-standing bookcases that are finished on all sides. Besides forming another room, the bookcases also serve as storage units -- books, stereo, TV and more.

The Better Homes and Gardens "New Decorating Book" (Meredith Corp., 1981) says that in living rooms, modular sofa pieces can form a variety of configurations that are easy to move about when you're ready for a change.

Floor-to-ceiling modular storage units are also available and like the seating units can be added to or separated depending on your space, adds the book. They are available with doored cabinets, a desk and varying sizes of open shelves.

In the bedroom, attractive armoires bought at estate or antique sales are a way to relieve bulging clothes closets.

In addition to the "New Decorating Book," Deymier advised looking at Better Homes and Gardens' quarterly publications. "Each issue concentrates on a particular style or problem."

Where to start? was the most often asked question at the seminar. Wayne Breeden recommended beginning with the color scheme. "Use the room like a canvas," he said. "Design it in your mind or on paper first."

The floor and wall treatments -- material and color, fabric, wallpaper or paint -- should be determined before buying any furniture. However, said Breeden, if you're not starting from scratch, work the room around the furniture you have. Breeden recalled that one of his clients had a terrible, leather patchwork footstool, "a real eyesore, but it had nostalgic value," he said. "I suggested a slipcover be made for it. The client was able to keep the piece and blend it into the overall design of the room."

After the floor and walls are painted or papered, you can focus on furniture, said Breeden. Be sure to bring the measurements of your room before you purchase anything. "There's nothing worse than buying an oversized piece of furniture and discovering when it's delivered that it must be returned," said Breeden. "Some furniture outlets refuse to take back a purchase."

Be patient, he warned. Don't plan on having a specific piece of furniture by any set date. "You often have to wait for a product to arrive. However, be patient. It's worth the wait if that product is something good, rather than settling for something that's on hand."

Use your imagination, advises Breeden. Try to get the room design in your mind. Contemporary and traditional designs can work together.

Paneling a room adds warmth and gives a totally new look to the room, pointed out Carol Alan of Weyerhaeuser Paneling. "People tend to think of brown wood when they think of paneling," said Alan during her slide presentation. "Paneling has come a long way. It now comes in patterns, many color shades and textures." The 300-plus Weyerhaeuser collection includes oak, elm, hickory, cherry, walnut, pine and maple. Among the patterned panels: adobe, brick, country road, floral, forests, seashore and a crossplanking pattern. Alan said the patterns can be combined. For the kitchen or a wet bar, Weyerhaeuser makes the "Ceramatex" panel, which can be easily wiped with a sponge.

Paneling, Alan told the group, doesn't have to be used on all four walls or even on the entire wall. "You can paint the bottom third of a wall, add a chair rail or molding strip at the paint line and panel the remaining two-thirds. Or vice-versa.

"You can also 'feature' one wall by paneling it only and leaving the other three walls painted."

To maintain paneling, Alan said, wiping with a damp cloth is all that's needed. "For nicks and scratches, shoe polish works wonders," she added.

Woodward & Lothrop will hold future design seminars zeroing in on different design elements such as color and spatial relation. Public relations director Joanne Steller invites topic ideas. Call 347-5300, ext. 2367.

A decorating-with-crafts week featuring the works of local craftspeople will be held at Woodies, March 8 through 13. Some of the artists will be available to demonstrate their work.