Walls

• 1). Measure the basement walls. Use the measurements to purchase the insulation. Two-inch-thick sheets of polystyrene work well for finishing basement walls.
  
  
• 2). Apply foam board adhesive to the back of the polystyrene sheets and press it into place.
  
  
• 3). Continue adding insulation sheets to the walls until you've covered them all.
  
  
• 4). Attach horizontal 1-by-3-inch boards to the wall using 4-inch spring spikes. For an 8-foot wall, you need about five boards spaced equally apart. Drill 5-inch holes every 20 inches or so through the boards and the insulation. Install the spikes with a hammer.
  
  
• 5). Add vertical 1-by-3-inch boards every 16 inches and connect them to the horizontal boards with drywall screws.
  
  
• 6). Install wall boards to the boards using drywall screws to complete the finished walls.
  
  

Ceiling

• 1). Install batts of insulation between the joists in the basement ceiling.
  
  
• 2). Secure the insulation to the joists using a staple gun. The staples need to go right at the base of the joists and through the paper-faced side of the insulation.
  
  
• 3). Measure the total ceiling space you need to cover. Use the measurements to figure out how much 1.5-inch drywall you need.
  
  
• 4). Use drywall nails to attach the drywall directly to the joists in your basement ceiling to finish the job.