3 steps for setting up a realistic budget for your remodeling project.

1. Go shopping and find out what you want.

Start making trips to home improvement shops. Browse through the different stores at your leisure. Go get a bunch of different home decorating and home remodeling magazines. Look through books about architecture and design.

You need to explore all of the different options that are out there so that you can decide what it is that you really like and that you really want. Perhaps looking through all of these different pictures can help you realize that instead of a stainless steel kitchen, you actually prefer the warmth of copper.

So now you know what it is that you like. Now it's time for you to look through those different product catalogs and different home improvement showrooms and look at prices. Perhaps you adore the look and feel of granite countertops. But you go to the store and find out that they cost tens of thousands of dollars. However, you can get other countertop material that looks and feels just like granite, but for thousands of dollars less.

2. Set a budget by asking yourself a number of different questions.

Home remodeling projects can cost quite a pretty penny. Remodeling Magazine said that the average cost for remodeling an upscale kitchen can be around $82,000. This includes all new appliances and all new cabinets.

You might be wanting to spend more money than this on your home remodeling project, or less money. But there are a number of ways that you can determine how much money you want to spend for your budget.

Ask yourself the following question: after going through all of your finances, what can you really afford to spend on your remodeling project? Contact the National Association of the Remodeling Industry for a worksheet that will help you determine how much you can spend on your project.

Next ask yourself the following question: How long am I going to be in this specific home?

The amount of money that you spend should also be determined by the amount of time that you plan on spending in this home. If you are going to be living there for less than five years, then any remodeling that you do should be approached as improvements on an investment. If you plan on staying in your house longer, then do whatever you need to in order to fit the needs of your family.

The third question to ask yourself is what will the remodeling do to my house's value in comparison to the neighborhood? You can over-improve your property, which could end up being detrimental to you in the long run. Or perhaps you need to remodel to meet the standard of the houses in your neighborhood.

3. Don't forget to expect the unexpected.

No matter how perfectly and specifically you work out your remodeling plans, there will always be some surprises that happen that will cost money. So when you work out your realistic budget, make sure that you leave extra money in the budget for those surprises.