But before we go any further this must be said: make sure your basement is waterproofed and insulated properly before you start finishing it. Failing to do this is sure to come back and bite you in the end.
Light
As in any room in your home a layered lighting plan is important. Low ceilings and little natural light make the majority of basements dark and the only way to counteract it is with proper lighting. Start off with the proper ceiling lights. Pot lights usually work best. Wall sconces are a great and decorative choice. But with all your lights try and stay away from ambered or yellow shades as this darkens the room. Put all your lighting on dimmers and use lots of switches so you can choose what lights you want on or off.
Once you've got the ceiling lights, take care of the task and ambient lighting. Use a mix of table lamps and floor lamps.
I did the picture below and it was quite easy. Install crown moulding lower than the ceiling around the perimeter of the room and lay rope lighting inside. You will be surprised at how much light it gives but without being too bright. Make sure it is on a separate switch. We actually did this in my master bedroom after the room was finished. I had the installer go straight up from a light switch with the wiring and add another light switch above the existing one. You can just see the hole where the wiring comes out. Rope lighting gives you the option of plugging in or wiring in and I chose the latter. This hole is not visible when you are standing on the floor.
Color
Most people will decide on a color for paint before anything else but this is really backwards. Plan for your sofa, area rug, accessories first. Then pick a color from these or one that will compliment your choices.
The general rule is that lighter colors are best in a basement. Light walls and floors will help lift up a dark and dreary basement – but they're not the only options. You can certainly go with darker colors as long as you have sufficient lighting but limit them to one per space as the idea here is to be light. There are beautiful colors out there that aren't just white or beige but still keep a light feeling in a space.
That said, don't go with a dark color on the ceiling. It will become oppressive and heavy. A good idea is always to go with a lighter shade of the wall color or some version of off-white. It will make the ceiling appear higher which is exactly what you want in a basement.
Hanging art on the walls is another great way to incorporate color and pattern into a basement. Decide on the look you want and then go for it. Just be sure not to hang your art too high. Hang it at eye level to create the illusion of height above the piece.
Flooring
This is where you plan for the unfortunate.
Because you never can be too sure your basement won't at some time be damp or wet some choices for flooring are just not advisable. Hardwood and laminate come to mind. Carpet , if used, must be able to be pulled up but that won't be a fun job, so opt for an area rug instead to warm bare space. This can easily be pulled out and cleaned if necessary. Tile is a good choice and you could use some in floor heat in strategic places like the bathroom.
Whatever flooring you choose (whether it's vinyl, laminate, tile, etc.), continue it throughout the entire basement, even in different rooms. The continuity will make the space appear larger. Whenever you change the flooring it creates a visual break and makes a space appear slightly cluttered.
Window Treatments
As I mentioned earlier if you can, put in larger windows. Those small basement windows don't let in much light and are not very appealing.
Privacy will likely be a concern but you want to take advantage of as much natural light as possible. There are some really nice sheer blinds on the market now which would give privacy by day but still let in the light. Consider side draperies that when closed , cover the whole window. Make these wider and longer than the actual window. You can be very creative and disguise the window's size. In one home I lived in the basement windows looked under the deck. I had "windows of mirror" made, trimmed them out and they were on hinges so I could access the outside. But they were made the size of what a larger window would have been for that space. The mirror gave the illusion of deeper space and reflected light back into the room.
Decorating
A lot of people simply give up when it comes to the basement. It becomes a dumping ground for extra furniture and other stuff that doesn't have a home on the upper floors. If you want your basement to look good you should abide by the same rules you would upstairs and arrange items appropriately. Consider traffic flow and create conversation areas.
If this is the room you choose for you television viewing and entertaining then you want it to be comfortable and pleasing. So with that in mind have storage for toys , sporting equipment and dvd's , etc. Keep clutter out of view. Closets under the stairs or somewhere else will keep things orderly.
A fireplace whether it be gas or electric is a nice warm touch. Bookshelves for, of course, books but for decorative knick knacks.
A small kitchen area with a bar fridge and sink needn't be a huge cost or large. With cupboards from a box store and the plumbing already there it could be an easy do-it-yourself for a lot of men. A bathroom should be included in your plans for convenience and especially if you have a bedroom in the basement.
Overall
A basement can be such an asset that it is a shame not to use it. The possibilities are endless. A home office, spare bedroom, craft room, play room and exercise room are a few ideas that come to mind. Go on the internet and look at pictures of finished basements or go to show homes. Show homes are a great way to garner ideas that you can use in one form or another in your home.
Basements are no longer the room with shingles on the walls or fake brick fake fireplace and shag rugs. Those basement were dark and dated. Today we strive for a room that is as nice as our living room upstairs, a pleasure to be in. Having a bright, clean and beautiful basement will add value to your home.