1. Pick a project that’ll pay off

If you are making improvements to increase the value of your home (and according to statistics, about one-third of remodeling homeowners are), avoid the temptation to over-improve for your neighborhood. Most major home improvements will pay off in resale just 80 to 90 cents for each dollar spent. Get an idea of what’s worth it and what’s not (think kitchens and bathrooms).

2. Tackle structural flaws first

If your home has structural or mechanical problems, fix those first. Whether you plan to stick around for a few years, or whether you plan to sell, it is vital that you take care of these problems that can turn into safety issues. Unchecked, a leaky roof or an electrical issue can cause larger (and more expensive) problems down the road. Plus, if you try to sell, you will have a hard time. Tackle the essentials before you start on other home improvement projects.

3. Set a budget and line up the dough

Before you take sledgehammer to drywall, decide on a budget (be firm) and earmark the needed funds. Hopefully, this is something you’ve been planning for a while and have socked away some money in an appropriate, safe, short-term savings vehicle. If you are borrowing against your home to fund a project, make sure you calculate the associated costs and add that into your budget.

4. Focus on things your family needs

Remodeling should be practical. Figure out what bothers you the most about your home, and fix those things. Also, consider items that can lower your overall costs. Some green home improvements, such as adding insulation, better windows and upgrading your furnace, can provide you with monthly savings — and you can get a tax credit too. Think about practical things that will make your home more comfortable for your family first, and then add bling later if you think it will enhance your quality of life.

5. Ask for official papers

When you’re done picking the perfect project and planning your budget, you’re halfway there. Do yourself a favor and spend just as much time picking your pros for the job as you did deciding on what color granite to use on the countertops. Choose a properly licensed, insured, experienced, and financially stable contracting firm.

6. Stick to the budget

Cost overruns occur when you do not have firm design plans and before accepting estimates. So write down your “must haves,” “nice to haves,” and “can live withouts,” and share these preferences with your contractor. Should he or she have to scale back the project to stay within your budget, you’ll each have a prioritized list of what goes first.