If you use something smaller, say a 5x7, the bed does not fit well on the rug. Furthermore, the bed looks so much smaller when you use a smaller rug. In the following diagram, the beds at the bottom are the same size as the ones at the top. It is also good to push the rug all the way up to the wall behind the bed. If the rug doesn't reach the foot of the bed, it looks like highwater pants. So remember the size of the rug when you're planning your bedroom. If you have a king sized bed, we would recommend moving up to a 9x12, if you have the space (and the budget) for it. The only instance that a 5x7 rug would really work is in the case of a single twin bed. Using the right size is much more aesthetically pleasing in the room. If your room is smaller, there are other options (such as using a runner on either side of the bed to save space).
When it comes to your living room, you have to play it by "eye" when placing your rug. Additionally, it's rare that you have a space large enough to place all of your living room furniture on one large rug (like a 9x12). The rule of thumb is to put the front legs of the couch and/or chairs on the rug, and it still creates a separate and more intimate space that way. The only negative aspect in this scenario is having a rug that is too small and centered in the room. If your coffee table is the only thing that can fit on the rug, it's too small. This all comes down to choosing the correct size when purchasing a rug. There are other factors (like budget) that might prevent you from getting the right size. Have any other questions? Feel free to give us a call at 704 979 RUGS!
Source: http://www.burlapandlaceblog.com/2013/05/how-to-series-area-rug-placement.html