Rachael has a few decorating tips to set a holly-jolly mood right away. Create a festive bar by covering a side table in wrapping paper and decorate it with a strand of Charlie Brown Christmas-style lights. Move the furniture around to "let your house have fun," Rachael says. "Then you're not going to be uptight about it all night, wandering around after people fluffing pillows." Rachael took full advantage of Jill's collection of decorative bowls. "She took Christmas balls and fruit and put them together throughout my whole house," Jill says.

Plus, to maintain the fun, funky retro theme, Rachael put classic holiday movies—with the sound on mute—on all of Jill's televisions. This, she says, gets people talking about their favorite scenes from those heart-warming classics like It's a Wonderful Life and Miracle on 34th Street!