Am I Over-reacting??

Your MIL is self-centered. It may be her nature but a lot of people also become like that as they age. On top of that you and your husband have created a very cushy lifestyle for her where she doesn’t even have to lift a finger.
Honestly I don’t understand this mentality in India that one has to cater to parents and in-laws hand and foot even when they are hale and hearty. It would be better for everyone if people maintained their basic independence until they were genuinely unable to function otherwise. A family member can be expected to participate in basic chores and family activities. Anyway that’s water under the bridge here.
I know it’s not easy to shift to a bigger house which is the most obvious solution. Can you set up a cot in the living room for your kids? It’s also important that you both have your privacy as a couple and if your husband won’t say anything then your MIL will not change.

 

This is easier said than done depending on where they live in India. Space is still at a premium in many cities and the 2-bedroom might have been what they could afford at the time, particularly since OP says they took a huge pay cut. It is not uncommon to see setups like this still, especially in cities like Mumbai. We also had a similar setup for several years in my childhood: 2 grandparents, 2 parents and 2 kids in a 2BHK. When we had exams my grandparents would move to the hall so we could study in quiet inside the room. At all other times we kids slept in the living room floor on roll-out mattresses that would be put away every morning. The key is that all parties need to be willing to adjust and compromise in the space available.

 

I have seen peace returning to families with the bluetooth headsets, @Rihana !
It works!
But she should not be forced to use them day in day out - ask her to use it only after 10 pm

@geeta79 - you should have done this long ago - let me throw a few ideas - see what works for you!

I would suggest even now, dont fight for temporary problems - look for the root cause and offer permanent solutions

You could plan a bit in advance - assuming you cannot shift your home, you could convert the Master bedroom into kids + elderly room and you and DH could move to the other bedroom!

Right now, summer has started! Use a foldable mattress/ sofa and let kids sleep in the hall !
Unless your younger son is < 5, move both out in one shot. One world war is better than 2 world wars.

Complete the planning, purchase and movements before the offline school starts, so that they are all settled well before another change.

Convert your MILs bed to a 4 by 6 or a single cot depending on the space. Move her TV in a different direction, facing only her side or put the TV on a movable platform.
Every night at 10 pm, she could move it to her side and switch on the bluetooth headset.

Plan for a bunk bed in your MILs room so that your son would enjoy the move.

Look for convertible sofa-cum-bed type bunk bed options for the kids

Keep your kids books/toys in the hall and clothes in other room's closets - look at Ikea for ideas - they should only go to sleep there so that your MIL has her space at least during the day time...

Do you have a balcony that you could convert to kids study area ? Just seal off the railings and grills and voila - shelves and cupboards for toys and books!

I know you have pampered your MIL a lot - but see if you could offer her some incentive for the shift - what is she getting out of it? Make it attractive for her too !

Elderly people might be territorial about their bathrooms - consider giving her own bathroom while taking away her private bedroom space...

Train your kids to be aware of MILs personal items and spaces.

Involve the kids in the planning and exploring and shopping - give them their spaces and let them maintain it.

 

We have always lived in a big villa type house back in Sri Lanka. Ours was a 2 story house with 8 bedrooms.
After moving to abroad, we had to think twice before shifting to a BHK house. For a while, we even stayed in a 2 BHK apartment considering affordability.

I understand, it is not easy to plan based on just needs. Your affordability matters, and there can be many factors in deciding a house for the family.

But what is important here is, treating everyone living in that house as equal.

Looking at your post, I would have called this marriage life bad for the compromises and sacrifices you have been forced to do so far. But, you call it as a lovely life.

For me, any adult be it mom or MIL, male or female, should be able to take care of themselves on their own as long as they are hale & hearty.
Your MIL doesn't require 24/7 service and you should not be the one doing this kind of service for years.

Secondly, as a wife, you should have certain rights in decisions when it comes to major aspects of lives, such as living in India or abroad, buying a house or apartment, first floor or top floor, garden view or street view etc....
Because, you can't wait till your son grow old to buy an apartment with a garden view to enjoy life. That's risky. And compromising everything like this is not a great example for your young DD either

Having said that, let me share what I've done when I shared a 2 BHK home with 5 members including 2 young kids a few months before

I gave up the master bedroom, where a king size bed available to my mom & kids.
I & H moved into the second bedroom with a double bed, which was on size for us to enjoy our private life.

Mom used to watch TV till late night, because she has sleep issues. But I have asked her to watch the TV in the hall till kids fall asleep and then go back to her bedroom with the headset on.
This way, her ears won't get damaged much!

Kids rarely wake up at night with TV light. There are settings to change it to night mode.
Even if they wake up, they have no problem in falling back to sleep.

Mom did not have any issues in sharing her king size bed with my kids. Had she complained, I would have changed to one double bed (for kids) and one single bed (for mom) in that master bedroom to suit their needs.

Your H needs to propose these solutions with his mom immediately.
Your need for privacy shouldn't be brushed off just like all your other needs & wants.
Put your foot down, and ask your H to speak up.

 

As long as she is not creating drama just ignore her selfish attitude

remove tv from her room or tell her to watch tv in the hall after 10 pm.

she can watch tv in hall so ur kid can sleep. You and your DH have to put your foot down and restrict tv to hall after 10 pm.

 

Dear Op,
2BHK is a pretty big space for a family of 5, atleast here in Mumbai .

A few suggestions from me.
1. As suggested by others you can shift the TV to drawing room.
2. You can opt for sofa cum bed in your living room at night your kids can sleep there and during day time it will be converted into a sofa. Your home look out also wont effected. Let kids belongings be shifted in MIL room.
3. I won't advice to shift your MIL at drawing room, reason being aged people tend to forget and get confused even with very nominal changes.

I have experienced and seen many cases where elderly even forget things like how to chew or walk or dress. Think from long term prospective, it's better not to hamper with her set up.
4. You can put up room partitions (made of ply wood) and convert your MIL room into two, but it will be bit costly and your room looks will be effected.

I understand you had faced lots of difficulties during your initial days with no support, have faith those days have passed and now this phase will also pass.

In my opinion you are not over reacting, all you need is a closure of all the sufferings and emotional hardships. If possible you can have a word on this with your family.

 

It must be tough. But I have a different opinion. To be honest, I don’t think it’s an expectation from her to ‘help’ you with your kids. Kids are yours and hubbys to begin with. Ideally when she was younger, she should have stayed on her own and now older she can stay with her son but living life in her own terms. But you both have allowed her to be fully dependant on you. At this age tv is soemtimes their only entertainment. I know it’s annoying to see that (my mum is addicted to tv too) but after a lot of reading recently, I’ve come to understand that that generation have a lot of trauma too that they don’t know how to talk about, and tv is their only distraction and not entertainment.

get a nice day bed, recliner sofa for the hall and ask her to watch the tv there. She can watch till late and with the new sofa she might enjoy it. Then go to the room just to sleep. Else bunker bed for your kids and another bed for her. Tv direction towards her only. Maybe after seeing your kids sleep early, she might also unexpectedly change her lifestyle and sleep early.

 

Also as someone who has to sleep with her grandma, you need to see if even your kids can adapt to it! It’s not easy with their snoring and all that comes with their age.