Our living room is always a mess. The kids come in and strip their clothes off and throw them on the floor. Laundry is always in a holding stage on the couch waiting to be hung. Games and movies have taken over and have overflowed their "place." Our office is off of our living room, and the desk is always a mess and there are toys and my scrapbook stuff everywhere in a pile. This is the room off of our foyer, as well, so that's not good to see when you first come in the front door. I think I have good taste, and I've always said that if I could afford someone to come in and organize my stuff, I could keep it that way. I just get discouraged when I try to organize because I don't have the money to buy all the furniture and things I need to hide the mess and give things their proper "place." I could definitely use some help!
First, your kids learn from what they see. If your kids strip their clothes and throw them onto the floor, and you let them do that, then you are telling your kids that it's okay. That impression is reinforced by you leaving laundry in the living room. Neither you nor the kids are treating the space with the respect it deserves. Both you and the kids need to start picking up after yourself—toys, clothes, laundry. If there's a moment when something is left lying around, then you need to call a halt to all activity until it's put away. Establish the routine, stick to it yourself and model that behavior for your children.
Second, the furniture in your "office" area is totally unsatisfactory for your needs. The desk and the bookshelf are way too small. You need a space (and furniture) that will work for you and that provides you with the space you need to reasonably stores items. I know you're short on money at the moment, but consider buying an inexpensive, larger and unfinished bookshelf (or finding one at Goodwill) and painting it white to suit your décor. It will serve the purpose in the short term until you can afford the desk/shelving you need or can build in a desk/work area and bookshelves that would look great in this space.