First I should state that co-sleeping, or kids sleeping in the same bed as their parents, is a culture bound phenomenon that is inherently neither healthy or dysfunctional. So, if you’re from a culture where this is common, and none of the caveats I describe below are in play, no worries. However, there are instances when co-sleeping is symptomatic of an underlying problem. In my experience, the most common of these are marital disturbance, adult loneliness, anxiety–in the child and/or the parent(s)–or some combination of the three. The purpose of this post is to suggest strategies for dealing with situations when you wish for your child to sleep in his/her own room but s/he is freaked out about that (the other problems could be addressed in counseling; you may also find articles pertaining to those topics within this blog site).
Avoidance is rarely an effective strategy for coping with fears that your child has regarding developmentally appropriate activities or situations. As none of we engaged parents are happier than our least happy child, it’s natural for us to support avoiding those (developmentally appropriate activities or situations) that distress our child. But, avoidance is a jealous strategy; the more it is used the more it pulls to be used. Plus, avoidance doesn’t deal with the underlying problem. Keeping in mind that you may need professional and tailored consultation, here are some strategies to try on your own (some of these are merely strategies for promoting sleep hygiene).
• Set up an incentive program for sleeping alone. If your child is younger, or the 
problem is a mild one, a star chart may suffice (i.e., each successful night earns a star on a chart). Make it so that that your child earns something s/he desires after so many stars are on the chart. If your child is older, or the problem is more significant, it may be more effective to establish a daily incentive program (i.e., sleeping alone earns the privilege of watching TV the next day). There are multiple possible permutations of this that I review in Chapter Five of my parenting book. However, the bottom line idea is to make it in your child’s best interest, as s/he perceives such, to sleep alone.
• If your child is showing a lot of distress about this, you could use the technique of shaping. With your incentive program in place, let the first phase be a reward for something that is a small step forward from where you are at now (e.g., you lay with your child helping her/him to fall asleep in her/his bed, then leave, for a week; then progress to being in a chair in her room as s/he sleeps; then you are in the hallway, etc.).
• Install a nightlight if that comforts your child.
• Allow your child to fall asleep to soothing music or to an audio book of familiar material (you don’t want him/her trying to stay up to hear the next development in the plot line); just make sure it shuts off after a designated time. Alternatively, you could read your child a book. (You could also use shaping for both of these strategies).
• Your child may find a lavender aroma in the room to be soothing.
• A bath or shower before bed can be relaxing and prepare your child for sleep.
• Try to keep your child from consuming caffeinated beverages in the afternoon and evening. A balanced diet is also something that can make a positive contribution to most behavioral problems that kids display.
• Try to ritualize the hour before bedtime (i.e., usually the same procedures followed in the same order).
• Having had at least an hour a day of physical activity (i.e., sweating and breathing hard) can facilitate a good night’s sleep.
• Try to avoid intellectually demanding or exciting activities the hour before bedtime.
If these strategies don’t resolve the problem in a short period of time, and in consultation with your child’s pediatrician, it would usually be advisable to seek out the services of a qualified mental health professional. Click here for a referral.
Dr. David Palmiter's Blog for Hectic Parents 