Renovating your own home is deeply satisfying and—if you know what you're doing—can be a smart financial decision. On the other hand, renovations are easier on paper than in real life. A simple project can spiral into an over-budget nightmare of frustration.

Here are a few things to think about before starting your next home renovation project.

The Cost of the Project
There are two main types of savings to consider: materials and labor. As an industry outsider, it's unlikely that you'll be able to source materials for cheaper than a professional. You just don't have the professional relationships or bulk buying power.

You may be able to save money when it comes to labor—if you don't make any mistakes, if the project doesn't drag on for months longer than planned, and if you don't end up hiring a professional to fix the mess you made! Those are some pretty important considerations, so be honest with yourself: do you have what it takes to do the job right the first time? If not, you probably won't save big bucks—just the opposite.

Managing the Red Tape
Small home renovation projects don't require permits or approvals, but if you're organizing a large renovation, there may be a number of hoops to jump through. You may need to apply for an owner-builder permit, obtain planning and building approval, and perhaps purchase indemnity insurance.

Your Health and Safety
The older the home, the more likely it is to have been built with materials that contain toxic materials like asbestos and lead paints. Plus, some of the materials you'll be working with may be harmful if proper precautions aren't taken. A home renovation project that saves money but costs you your health may be more than you can afford.

The Next Steps
After considering all of the above, decide whether your renovation project is a job for the pros or not. It may be a blend: perhaps you can save some money by doing the cleaning and preparation yourself and hiring contractors to do the heavy lifting.

To find the right contractor, start with personal recommendations from your friends, neighbors or real estate agent. Then check the customer-written reviews on sites like Angieslist.com. You may even want to run a background check with Contractorcheck.com.