Chapter 3. Set Your Financial Goals

When my husband and I started to think about remodeling our octogenarian home a few years ago, our heads were filled with HGTV-fueled visions of what we could accomplish. A steam shower in our bathroom to create a spa-like experience at home. A beverage bar in our home office to satisfy the occasional urge for an espresso without having to trek the whole 12 feet into the kitchen. Radiant-heat flooring in numerous spots to ensure warm tootsies year-round.

The first builder's bid hit our e-mail box with a thud, however, followed by another and another. Much to our chagrin, outfitting our old house with every bell and whistle that we had dreamed of was going to cost much more than we had originally budgeted for the renovations. Meanwhile, the real estate market was sinking like a stone, making it less and less likely that we'd ever see a decent return on our copious upgrades.

Our choices were twofold. We could either plow ahead with everything that we wanted, budget and sinking housing market be damned, or we could get real and scale back the project.

We decided to do the latter and went back to the drawing board. Renovating our circa 1972 kitchen was on both of our "must-do" lists, as was improving our bathrooms (adios faux oak vanities!). Some of the other improvements that we had envisioned, however, easily fell into the category of "nice to have" rather than "must-do." We might consider them again some day, but for now we will concentrate on the ...

Get 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances now with the O’Reilly learning platform.

O’Reilly members experience live online training, plus books, videos, and digital content from nearly 200 publishers.