We have kitchen doors from the 70s or earlier. We would like to change the color but don't know whether we should stop there or go as far as changing cabinets. - John

John's got a lot of company. Kitchen & Bath Business Magazine forecasts that there will be 6 million kitchens remodeled this year at a total cost of $79 billion!

It isn't surprising. Kitchen remodeling projects generally recover nearly all of their costs when you sell your home. MSN House & Home released a report showing that projects costing up to $25,000 returned 90% or so when the home was sold.

So that's a good reason for redoing your kitchen. Another is that it's one of the most used rooms of your home. And, if you listen to the people who study such things, the more time your family spends in the kitchen the healthier and happier your family will be.

OK, so you're thinking about doing something. But, like John, you wonder how much to do. The best place to start is to figure out what you can afford. Kitchen projects can quickly get out of hand. Once started, it's easy to upgrade to a more expensive drawer pull or cabinet door. There's a lot of pressure to go just one step further. And then one more after that. But those decisions can be very expensive. Have a dollar limit in your mind based on what you can afford. Hold on to that boundary. Just about everyone, including your own ego, will want you go spend more.

And, expect some unanticipated expenses. It's prudent to only plan to spend 90% of the money you'll have available. Save the 10% for mid-project surprises.

Next you'll need to decide how extensive your remodel will be. It may be as simple as repainting wood cabinet doors and walls. Perhaps you'll want new countertops and faucets. Or it might be a matter of gutting the entire kitchen and starting from scratch.

Naturally, more extensive means more expensive. This is the stage to get some rough pricing for different aspects of the job. Bounce the costs against your budget. You should have enough information to decide how much you want to take on.

Some people will argue that it's ok to borrow for a kitchen remodel. After all, you're making your home more valuable. That's true. But you'll still end up repaying the loan when you sell. And that means less money in your pocket. If you do borrow, consider repaying the loan while you still live in your home.

If you're going to be making major changes, be sure to consider the three major functions of a kitchen: storage, preparation and clean-up. Think about how your family uses the current kitchen.

Make major decisions before you start construction. Remember making adjustments once work has started will be expensive.

New cabinets are generally the most-pricey part of a fully new kitchen. Choose them carefully. Their style and color will have a major impact on the room and your budget.

In fact, choose all your materials carefully. You'll find that quality varies considerably. The fact that there are a lot of choices means more work for you, but does provide a greater opportunity for savings.

Don't assume that the big home center store is the cheapest or best. Check with specialty kitchen and cabinet shops. Ask if they have any cabinets that they were unable to deliver. You may be able to benefit from another's mistake.

If the job is beyond do-it-yourselfing, ask around for a handyman or contractor. Unless the job is fairly simple (read inexpensive), you'll want to get three bids.

Check out contractors thoroughly. Ask for references and contact them. Ask the contractor about licenses, insurance and bonding. You don't want to make a mistake here. Under normal circumstances a full kitchen remodel will take about two months after planning and materials have been ordered. The wrong contractor could drag that out indefinitely.

Talk with the contractor before starting. Ask a lot of questions. The way they answer will tell you a lot about how they'll perform. For instance, some will encourage you to skip getting required permits. Better you should skip that contractor. Yes, the permits will cost you, but they'll also guarantee that the job is planned and done correctly. The building inspector can be your best insurance against shoddy work.

Finally, expect disruption. Eating all your meals out for two months can get expensive. So some families load up the freezer with meals that can be reheated in the microwave. It's easy to prepare extra portions of the meals that you're already making during the weeks before your kitchen is off limits.

Updating a kitchen can make a big difference in your home. Whether it's just painting cabinet doors or a full blown new kitchen, it takes time, consideration and money. Hopefully, whatever John decides will bring his family together and make many fine memories.

I just found an article you wrote on budgeting. You said to spend no more than 33% of your after-taxed salary on housing. I have to find an apartment and live on my own. I never had to do that before. I am struggling with a budget and not knowing what I can really afford for an apartment. -- Michael

Michael is right to make sure that his apartment expenses don't cripple his efforts to get off to a good financial start. And, he'll find that his choice of an apartment will make a huge difference on whether his budget (and his finances) work.

Before we look at Michael's housing question, let's spend a moment on constructing a budget. They're not nearly as scary as you might think. The purpose isn't to lock your money up where you can't get at it. A good budget simply provides information about your expenses and how they relate to your income. The goal is to help give you data to make good decisions.

Michael asked about after-tax income. There are two ways to do a budget. One includes your taxes and uses your "gross" (before tax) income. The other uses your "net income" (after tax). Generally, it's easier to use the after-tax method. It tends to be a little less complicated.

In an after-tax budget, Michael's take home pay would be his income. And he would not budget for any payroll deductions (i.e. insurance, retirement plans, taxes, etc.).

OK, now let's get back to Michael's main question. How much can he afford to spend on an apartment? It's generally accepted that 30 to 35% is about right for housing expenses. That would include rent, plus utilities, any maintenance and decorating.

Some would argue that Michael could spend up to 40% for housing. The trouble with that is Michael has a limited amount of money. His paycheck needs to cover housing, automobile (or transportation), food, insurance, entertainment, clothing, medical/dental, miscellaneous and debt repayment. So an increase in housing expense means a decrease somewhere else.

Michael didn't share what his income is. So we'll have to keep this somewhat general. But, we'll still be able to illustrate the point.

The three biggest expenses he'll face are housing, transportation and food. Along with 30% for housing, he'll probably need another 15% each for transportation and food. So he's already spent 60% of his money, leaving just 40% for everything else.

The quickest way for a budget to fail is to overspend these "big three" categories. If Michael spends 65 or 70%, it becomes almost impossible to make up the difference in the smaller categories. Even if he cuts back drastically in areas like entertainment and clothing, he just won't find enough savings to offset the additional expense.

Overspending in these big areas is also a problem because we often make commitments for months or even years in advance. It's not like your electric bill. If it was too high last month, you can start turning down the A/C today. But, if you agreed to make forty-eight auto payments, there's not much you can do about it for awhile. Or, if you do make a change, it will significantly disrupt your lifestyle.

Let's suppose that Michael's take home pay was $2,000 per month. He really wanted an apartment that cost $800 (40% of his income). Add his car payment ($225), gasoline ($75), groceries ($150) and restaurant/meals ($150). That totals $1,400 and only leaves him $600 to cover debt repayment, clothing, entertainment, medical, miscellaneous, savings and any unexpected bills. Chances are that he'll quickly be putting some of those expenses on his credit card and adding to the unpaid balance. At some future point, that will come back to haunt him.

If Michael were making a lot more, he'd have more flexibility. If his monthly income were $10,000, it wouldn't make as much difference if he spent 35 or even 40% of his income on housing. He'd have more in other categories to make up the difference.

Most of us live with limited income. It's important for us to get our housing, auto and food expenses under 60% of our take home pay if we're going to keep from getting into financial trouble.

So Michael is smart to pay attention to his housing costs. He's identified the cornerstone to a sound financial future. Let's hope he finds the perfect, affordable apartment!

We have kitchen doors from the 70s or earlier. We would like to change the color but don't know whether we should stop there or go as far as changing cabinets. - John

John's got a lot of company. Kitchen & Bath Business Magazine forecasts that there will be 6 million kitchens remodeled this year at a total cost of $79 billion!

It isn't surprising. Kitchen remodeling projects generally recover nearly all of their costs when you sell your home. MSN House & Home released a report showing that projects costing up to $25,000 returned 90% or so when the home was sold.

So that's a good reason for redoing your kitchen. Another is that it's one of the most used rooms of your home. And, if you listen to the people who study such things, the more time your family spends in the kitchen the healthier and happier your family will be.

OK, so you're thinking about doing something. But, like John, you wonder how much to do. The best place to start is to figure out what you can afford. Kitchen projects can quickly get out of hand. Once started, it's easy to upgrade to a more expensive drawer pull or cabinet door. There's a lot of pressure to go just one step further. And then one more after that. But those decisions can be very expensive. Have a dollar limit in your mind based on what you can afford. Hold on to that boundary. Just about everyone, including your own ego, will want you go spend more.

And, expect some unanticipated expenses. It's prudent to only plan to spend 90% of the money you'll have available. Save the 10% for mid-project surprises.

Next you'll need to decide how extensive your remodel will be. It may be as simple as repainting wood cabinet doors and walls. Perhaps you'll want new countertops and faucets. Or it might be a matter of gutting the entire kitchen and starting from scratch.

Naturally, more extensive means more expensive. This is the stage to get some rough pricing for different aspects of the job. Bounce the costs against your budget. You should have enough information to decide how much you want to take on.

Some people will argue that it's ok to borrow for a kitchen remodel. After all, you're making your home more valuable. That's true. But you'll still end up repaying the loan when you sell. And that means less money in your pocket. If you do borrow, consider repaying the loan while you still live in your home.

If you're going to be making major changes, be sure to consider the three major functions of a kitchen: storage, preparation and clean-up. Think about how your family uses the current kitchen.

Make major decisions before you start construction. Remember making adjustments once work has started will be expensive.

New cabinets are generally the most-pricey part of a fully new kitchen. Choose them carefully. Their style and color will have a major impact on the room and your budget.

In fact, choose all your materials carefully. You'll find that quality varies considerably. The fact that there are a lot of choices means more work for you, but does provide a greater opportunity for savings.

Don't assume that the big home center store is the cheapest or best. Check with specialty kitchen and cabinet shops. Ask if they have any cabinets that they were unable to deliver. You may be able to benefit from another's mistake.

If the job is beyond do-it-yourselfing, ask around for a handyman or contractor. Unless the job is fairly simple (read inexpensive), you'll want to get three bids.

Check out contractors thoroughly. Ask for references and contact them. Ask the contractor about licenses, insurance and bonding. You don't want to make a mistake here. Under normal circumstances a full kitchen remodel will take about two months after planning and materials have been ordered. The wrong contractor could drag that out indefinitely.

Talk with the contractor before starting. Ask a lot of questions. The way they answer will tell you a lot about how they'll perform. For instance, some will encourage you to skip getting required permits. Better you should skip that contractor. Yes, the permits will cost you, but they'll also guarantee that the job is planned and done correctly. The building inspector can be your best insurance against shoddy work.

Finally, expect disruption. Eating all your meals out for two months can get expensive. So some families load up the freezer with meals that can be reheated in the microwave. It's easy to prepare extra portions of the meals that you're already making during the weeks before your kitchen is off limits.

Updating a kitchen can make a big difference in your home. Whether it's just painting cabinet doors or a full blown new kitchen, it takes time, consideration and money. Hopefully, whatever John decides will bring his family together and make many fine memories.