Renovating your home can be remarkably expensive. If your home was built more than 10 years ago and you are doing a major remodel, it is likely you'll spend more to remodel your home than it cost to build. Part of the cost is that rather than working in a seamless, orderly process, the remodeling must happen around and on top of your existing home - the parts that won't be changed.

Here is an outline of the process you can use to develop a budget for your renovation.

Build a spreadsheet

Your spreadsheet will grow in scope and complexity. Be sure to get explicit, clear bids from everyone who will be working on the project. Add each bid to the spreadsheet.

Use a designer or architect

If you plan to spend more than $100,000 on your remodel, you'll want to hire a professional to help you figure out what to do and how much it will cost. The value of a professional will be in helping you to do something that not only you, but the people who may one day buy your home will like. In other words, they'll help to maximize the resale value of your home. In that sense, they pay for themselves. The first meeting should be about 90 days before you hope to start the project-perhaps longer if the construction business is tight.

Develop a formal request for proposal

With the help of the designer or architect, put together a detailed request for proposal, specifying everything you want done to your home. You cannot be too specific. It is easy to be too vague and have problems, as a result.

Include moving costs

While many people live in their home during a remodel, I've never talked to anyone who would recommend it. Budget for living elsewhere during the project. Be sure to get your contractor to commit to a deadline for the project so that you can budget accurately (then add 25 percent to the time for the project). You can be happy living in a clean, quiet and small apartment while you remodel rather than trying to live amidst the construction dust and noise with intermittent interruptions in water, sewer and power.

Get multiple bids on the construction

The biggest problem you'll face is that the contractors will likely give such dramatically different bids. One may give you a one page, hand-written proposal with a few notes and a single number representing the estimated cost while others will provide pages of details with lots of numbers leading to a final tally. This may sound better, but the contract may quickly explain that the format of the bid doesn't mean you can strike items and expect a corresponding deduction. Your designer or architect can help you evaluate the proposals.

Identify the appliance allowance

Each contractor will likely indicate that you can choose your own appliances and fixtures and will provide you with an allowance-or will simply exclude appliances and fixtures from the bid. In order to compare the bids, you'll need to figure out how much is included in each bid for these items.

Choose appliances and fixtures

You'll likely find that any budget provided by the contractor doesn't allow you to buy the fixtures you really want.

Put it all together

When you add up the cost of the designer and/or architect, the contractor plus appliances and fixtures, you'll likely be shocked. It will be much more expensive than you'd imagined. Rather than start over, work with your designer and the contractor you've chosen to identify ways to cut the costs of the project. You may decide that the kids' bedrooms don't need all the fancy upgrades you once envisioned.

Finalize the budget

Once you have been through this process, you should have a final budget for your project. Presuming that you've recovered from the heart attack you had when you tallied the numbers the first time, your challenge now is to pay for it.