Basement under construction

Basement Finishing on a Budget

Updated May 8, 2024 . AmFam Team

By: HomeAdvisor

It’s a common question these days: Should you move into a bigger home or stay where you’re at and finish the basement? Finding the right answer can be tricky. Perhaps the basement is in bad shape and needs a lot of cash and attention to get it into a build-ready state. But don’t panic just yet! We’ve got a few ideas to enhance your basement.

Refinishing the basement can be a sensible answer because moving can be overwhelming. Working intermittently on the basement is an attractive option because the impact to your life at home is frequently small. And when you remodel your basement, the mess is confined to an enclosed area or if you’re a DIYer you can take the project on as time allows.

Are you interested in working with a contractor? If so, keep in mind that the project costs can add up quickly. The price tag for a professionally refinished basement today can cost up to $20,000 to $30,000, so many families are electing to save thousands of dollars and take on the job themselves. So here are some frugal ideas that can take your basement from that dark scary place your kids won’t go to a bright, cheery place that they won’t want to leave!

Finished Basements and Leaking Water

According to the American Society of Home Inspectors, 60 percent of basements either leak water, are chronically damp or suffer from plumbing issues that flood the space seasonally. If you don't remove the moisture before you start finishing, you’ll likely find afterwards that mold and mildew have infiltrated through the walls and into the living space. And the costs to repair and mitigate can be astronomical. So, start by outsourcing the heavy lifting and seek professional help. This includes hiring a contractor to water seal your basement by digging a trench around the foundation or cutting into the cement floor of the basement and installing drain tiles there. You’re also need a sump pump if you don’t have one already. We recommend a second, battery-operated unit so that your basement will be better protected in case the power goes out or the first one fails.

Now for the good news: American Family Insurance offers additional peace of mind with sump pump coverage, helping you cover expenses if it should ever fail. Water damage due to sump pump failure can be costly. Our water damage and sump pump failure coverage can help cover the cost of repairs caused by water leaking into a home due to a backed-up drain, malfunctioning sump pump or other pipe and drain faults. While it’s not automatically included in a homeowners policy, it can easily be added on for a fraction of what it would cost to repair and replace water-damaged items in your home.

Typically contractors will guarantee their work, and that helps to insulate you from paying for expensive repairs. Get three quotes for each of the following:

  • Seal the cracks in your foundation ($4,000)
  • Drain tile installation for basements that leak water ($5,000 and up depending on the scale of the problem)
  • Sump pump installation ($1,200)
  • Backup sump pump system installation ($1,000)
  • Repair or unclog downspouts and gutters to keep water out of your basement ($330)
*Project cost information found on HomeAdvisor’s True Cost Guide.

Be sure to get references from your prospective contractors. Additionally, do homework online and read reviews before you sign. Another important detail is get the contractor to dedicate to a finish date when possible, so the project doesn’t linger, as other efforts are held up because the big jobs aren’t yet complete.

Finishing Basement Ceilings

Most do-it-yourselfers lack the expertise to install a ceiling properly and safely. It's expensive and usually requires a professional, so if you have the budget, that’s one more upgrade that you may also want to outsource. Suspended ceilings are a more affordable option that offer easy access to utilities, but installation can still be difficult.

To save money and make your basement look more like a living space and less like a cellar, opt for paint. A fresh coat of paint will camouflage or even accentuate exposed rafters, pipes and ductwork. A coat of white paint will lighten the basement, making the space look bigger and more open. Or lean into an industrial motif with black or dark gray paint. Painting exposed pipes and ductwork will help them to blend in, becoming less noticeable and it can add an interesting architectural feature.

Fully finished basement

Covering the Walls

Covering cinder block or plywood walls with drywall gets costly quickly. To save money, limit the use of drywall or look for other options to cover a portion of the walls. Again, paint is the quickest and cheapest way to make a basement look more inviting. A great idea is to start with a primer layer of mold abating paint that also inhibits pealing if you plan to paint directly on the foundation wall. Cement or cinder block walls will then take on a whole new feel with solid warm tones or, if you’re artistically inclined, with an interesting mural. Vintage wooden or metal shutters are a great way to cover unfinished walls while adding personality.

Save money by strategically hanging curtains, creatively placing real or artificial plants and trees or even dropping bamboo shades from the ceiling. Furniture, like back-to-back bookcases, can help to separate a space while offering functional storage for books and knickknacks. See? You’re well on your way to a great space!

Improving the Floors of Your Finished Basement

It can cost quite a bit to make a basement’s floor look and feel welcoming. Consider less costly options like inexpensive laminate or vinyl flooring. Concrete floors are easily painted, or for a cooler cosmetic finish, try acid staining the cement. Finish with a durable polyurethane coat and you’re going to love the new look.

Carpet is an option, but can be tricky in basements where fibers, backing or the pad itself often will trap moisture. Instead, try leaving the original floor intact and cover it with a large area rug or interlocking foam floor mats.

Add Lighting to the Finished Basement

Many unfinished basements have only a single hanging bulb for illumination. If you want to avoid expensive electrical work, get creative with lighting. Crisscross strands of lights, strategically position lamps or use strings of LED lighting to brighten the space for a great look on a shoestring budget.

Build a Simple Basement Bathroom

A powder room in your newly finished basement is a nice feature, especially if you plan to use the space for entertaining, but the cost can quickly overextend your budget. Remember that even a half bathroom can add thousands to your asking price when it comes time to sell. So you may be able to recover those costs.

If the plumbing and drains are already roughed in, adding a bath can be quite affordable. To keep the bath on budget, just knock out the basics. Include only a sink and toilet and avoid expensive touches like granite countertops, pricey fixtures and doorways — these can quickly add up. One simple answer is to partition a space for a bathroom using freestanding walls or even curtains.

Taking on a major remodel like this can be done if you budget your money and your time the right way. Creating a functional space in your basement doesn't have to be expensive, either. Refer to these tips frequently when you finish your basement on your own. You’ll save money and feel great knowing you made informed decisions along the way.

This article is for informational purposes only and based on information that is widely available from sources not associated with American Family Mutual Insurance Company, S.I. nor its Operating Companies. While we do our best to provide helpful resources, we make no guarantees or promises about the reliability, accuracy, or any potential outcomes. Contact an appropriate professional for advice specific to your situation.

This information represents only a brief description of coverages, is not part of your policy, and is not a promise or guarantee of coverage. If there is any conflict between this information and your policy, the provisions of the policy will prevail. Insurance policy terms and conditions may apply. Exclusions may apply to policies, endorsements, or riders. Coverage may vary by state and may be subject to change. Some products are not available in every state. Please read your policy and contact your agent for assistance.

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