Well congratulations on your new home! And welcome to the money pit, er, I mean, home ownership club! I didn't see where you indicated what part of the country you live in. I live in Florida so my priorities might not match yours if you live in a cold part of the country. Generally speaking, my advice is to spend the "hard money" first no matter where you live. The "hard money" is what you spend to protect your investment that doesn't necessarily have any impact on aesthetics. Address structural and infrastructure issues first how is the roof, the foundation, the plumbing, the electricity, heating and cooling systems, windows, doors, floors and walls? It makes no sense to take down a nasty popcorn ceiling and make it beautiful only to have a roof leak ruin it and have to do it again. Likewise I wouldn't get hardwood floors refinished until I knew that my floor joists were sound. So spend the money that seems to go toward invisible things first  this is a major investment in your peace of mind and will help you to avoid spending any money twice. If you didn't have a home inspection before you bought your house, do it now. We bought our house "as-is" from an estate knowing that the seller wasn't going to do any repairs, but we paid for a home inspection to help us prioritize the work that needed to be done and spot things that we might not notice. A good home inspection is worth the money. In the last year, I put on a new metal roof (energy savings and hurricane protection), and all new impact resistant doors and windows (again with the energy savings and hurricane preparedness). The inside is a mess (exposed concrete slab, kitchen remodel in progress, ceiling patches from previous water intrusion). All of my new windows went in with virtually NO damage inside. I did have to touch up the paint job to the outside that was done in March. The new doors were quite another story. But, hey, now that you are a homeowner, you are quickly going to become intimately acquainted with drywall spackle and a putty knife and paint and brush. You can perform minor magic with paint and spackle. That's easy and fairly cheap. Your kid decides to see if a cutting board will fly like a frisbee? Spackle and paint. Fido decides to chew the corner off the wall because you left him at home alone while you went to work? Spackle and paint will fix that, too. Make sure you get enough paint to have some left over when you are done! It comes in handy. When it comes to doing work that is cosmetic, I'd advise you to start at the top and work your way down. If you can get ceiling work  texture and paint  done before moving in, your life will be simpler. Except maybe for carpeting. I have asthma and allergies. Why we didn't pull out the carpeting when we first moved in is beyond me. We've been living with the naked concrete slab for almost a year. Yes, it is ugly. Yes, it spawns dirt moments after it is swept. But I haven't had a asthma attack in a LONG time. Your mileage may vary. You can save a lot of money by being flexible and shopping online. If you "get married" to one specific thing, then you lose options to save money. For example, I knew I wanted a single-lever faucet with a non-polished, white metal finish. I looked at the prices for good brands in person and then I looked to see what I could find online. I found a brushed chrome Price-Pfister single-lever bathroom faucet on eBay for $25; the seller was one I've seen favorably mentioned here. I wouldn't spend over $100 for that faucet, but for $25, I'll pay $10 for shipping, and maybe have to bid on more than one auction to get the minimum bid price. I ended up getting two of them at the minimum bid price in about 24 hours. I didn't get to combine the shipping cost, but I still saved a bundle. Check your local Habitat for Humanity. Mine has a resale store where you can buy building materials for a fraction of retail. I haven't bee there yet  it's probably like thrift store shopping  you never know what you'll find. I was at Blowes today and found fancy white vitreous china bathroom sinks marked down to $19.50 (discontinued item). I don't need a fancy one, but I want white. I can live with the fancy one! My home is not architecturally distinctive in any way, but there is an architectural salvage place not far from here that is chock full of goodies, from door knobs and chandeliers to kitchen cabinets and doors. You can also pick up some good deals by watching Craig's List for your area. Examine everything carefully and use common sense  don't go to a stranger's home to buy something by yourself. Some people have said some very harsh, judgmental things to you. I hope that you will ignore them. I haven't heard you say that your objective in life is to sit in front of the tv and I don't think that it's unreasonable to want ONE orderly space to retreat to. It's not realistic to expect that you will feel like spending EVERY waking moment at work or working on your house. You will need to take breaks and PLAN on down time if you are going to live in your house while you work on it. Otherwise life becomes pretty miserable pretty quickly. You can do this if you want it. Lets face it, you have to live somewhere. You will need to make a priority list that fits YOUR needs. That list can and will change when things happen. Since I moved into this house five years ago, the AC died and had to be replaced ($5K), the power supply to the house died and had to be replaced ($1.5K), my 16 year old dog, 82 year old father in law and 40 year old niece died and can never be replaced at any cost. So I probably spent some time in front of the tv when I "should have" been painting a wall. Don't apologize for wanting some comfort in your life. Best of luck to you. B

Some really great advice here. First though, congrats on your charming home purchase. So much potential! I like traditional, but a more eclectic mix. I subscribe to Traditional Home Mag for inspiration. Take a look at their website too. You both may like it. Also, please use your existing furniture and buy what you both like a piece at a time. You don’t have to have it completely furnished right away, take your time and buy what you love Decide on colors for the walls, then rug colors. I like the rugs and couches previously posted, take time to find what style you both like. I tend to pick neutral furniture and accessorize with colorful pillows, artwork and accessories as those are easy to change if you want to switch things up.

Based on what I can see in the photos (you didn't show the left side of the arch into the nook), I don't know that I would treat the nook and the living room as separate spaces. I might just spill the living room furniture across the space and ignore the minimal separation the architecture creates. If you don't want to do that (or it doesn't make sense because of something I'm not seeing), your could do a couple things with the nook. I think it would be cool to have a window seat in there. (Do you have pets? Pets would love a window seat.) If not that, then I would put a couple chairs and a small table there for games, puzzles, drinking a cup of coffee, or using a laptop.