Your Budget Write down everything that you dream about doing for your home renovation. Then, make another list of all the things that must be renovated or updated. Consider how much more a month you could put toward a home improvement loan or how much money you have saved for the project. Pick up the phone and call architects and contractors to get an estimate of how much your renovation will cost. Compare the cost estimate with your preliminary budget, and decide what you can reasonably afford to do. Plan to pad your budget 20% or so to account for unexpected cost overruns.
Your Time Frame Does your home renovation need to be completed by a certain time or event? Are you planning to move out of town or are you having a baby and need the extra room? Renovations can take longer than expected, so only plan to tackle what can be accomplished within your timeframe.
Your Skills Can any projects on your list become do-it-yourself projects? Do you have the skills - much less the time - to tackle such a project? Most people think they can easily re-tile a bathroom, install new hardwood flooring or build a new room addition only to find these projects still remain half-finished years later. Be realistic about what you can and cannot accomplish.
Your Goals Why do you want to remodel? Has your family outgrown your current floor plan? Have you always wanted a gourmet kitchen? Do you plan to sell soon and want to get the most resale value possible? Establish what your overall goal is with the remodel.
Your Needs Determine what you need to do to your home to meet your goal. Now is the time to prioritize projects - a new plumbing and heating and electrical system may be more important than replacing your home's flooring.