I'm not sure what what other families do, but co-sleeping with our babies wasn't an option, our small bed was cosy enough with the two of us! What we've used is a baby hammock that hangs off a big spring. (natures nest or amby, You can buy them second hand.) We've hung it from a bolt in our roof and it's been great. The manufacturers threaten dire consequences if you hang it off anything other than their absolutely huge frame but as long as your roof and the bolt is pretty sturdy you should be fine! If they wake in the night they make the spring move and it bounces them back to sleep. its also really small compared to most other baby beds and can be taken down or moved as you need.