How to Budget for a Home Theater System

One of the top questions we get all the time is, “How should I allocate my home theater budget to the many audio and video components that make up a great home theater system?”  There is nothing like achieving the movie theater experience in your own home.  You, your friends, and your family will enjoy it for decades and our thousands of happy customers tell us their home theater room is used almost every day of the week.

One of the top questions we get all the time is, “How should I allocate my home theater budget to the many audio and video components that make up a great home theater system?”  There is nothing like achieving the movie theater experience in your own home.  You, your friends, and your family will enjoy it for decades and our thousands of happy customers tell us their home theater room is used almost every day of the week.

Major Home Theater Budget Buckets

The old saying about something is only as good as the weakest link certainly applies to home theater systems.  We find, when most people start thinking about a new home theater, the first thing they begin to research is the video portion.  And there is a good reason for this, it is great fun to dream about a large 4K TV or even better, a projector and screen combination that puts you right in the movie theater.

Our experience tells us that many people neglect to think about the audio.  We suggest you try this little experiment - watch one of your favorite movie scenes that contains some spoken voice.  Try it the first time with the volume muted for a minute.  Then watch it again with your eyes shut and the volume turned up. That simple experiment should show you how important great home theater speakers will be for the best experience.

Another thing we will talk about in each of these buckets is the technology and its speed of change.  There are parts of your home theater you only have to purchase once and they will last for decades, whereas others change quite often. To us, it makes the most sense to make sure you do not scrimp on the things you may only have to buy once. 

This statement may sound a bit confusing, but we feel the larger your budget, the bigger the percentage of it you can allocate to the display.  We say this because we run into so many people who have spent 75% or more of their budget on the TV and have far too little left to get any type of decent audio quality from the surround sound system. 

Our advice: if you are allocating 10,000 or less for your entire home theater system, do not spend more than 30% of your budget on the display.  

For those of you with much larger budgets, you will have enough funds to allocate for a great Dolby Atmos speaker system.  You can then put a bigger percentage of your total budget into an amazing 2.40 widescreen front projection system which obviously will cost more than an 85” flat panel.

While we're talking about front projection systems, the screen is a super important part of the equation.  While projector technology usually changes at a very fast rate, screens can last you for decades if you buy a good one.  Some screen companies will even let you buy just replacement screen material should their tech improve over time.  Do not cut corners on your projection screen!

The Speaker Package

For a great home theater, you will need basic surround sound at a minimum. For the best Dolby Atmos system, you might have 16 or more speakers in your space.  Explore our guide to home theater speaker layouts to learn more.

We feel the sound is one of, if not the most important part of a home theater. We suggest you buy all of the main speakers from the same brand.   Do not ever cut corners on the main front three speakers either.  Your center channel will be the most important speaker in your system and the left and right main speakers are critical as well.   If your budget is under $10,000 we feel you should allocate at least 40-50% of it to the speaker package.  

There is nothing like immersive audio to make you believe you are inside the movie.  The great part about speakers is they will last for decades with little to zero maintenance. If you buy good ones, you will be happy with them for years to come. Investing in great speakers is a very smart move.

Home Theater Receiver or Separate Components?

Your receiver or separate components are the brains and power for your entire system.  This bucket of your budget must decode the latest surround sound formats and power all of your speakers.  

The technology in home theater receivers does change fairly often as both video and audio formats are always improving.  Some allow you to run software updates over time which is something to look for.  But, after 5-10 years, most home theater receivers do not have the internal horsepower to keep up.  For us, this means you should not put a huge chunk of your budget into a top-of-the-line home theater receiver.  It will go out of date eventually.  We feel you should take about 30-35% of what you invested in your speakers and put it towards your home theater receiver.  

For those of you wanting a long term investment with more funds to invest, consider separate components.   This means you will have power amps to drive your speakers and a processor to do all the audio and video decoding and switching.  Power amps are like speakers, they last for decades and separates normally sound far more powerful than receivers.  If you have a larger budget, consider separate components as you can just replace the processor every few years if you want to have the latest and greatest.

Home Theater Sources

Years ago home theater sources like blu ray players were a bigger part of the budget. In today’s world, for most people, all you need is a 4K Roku or Apple TV. It does not hurt to have a decent blu ray player, but you will not have to allocate much of your budget at all for this home theater bucket.

Acoustic Room Treatment

This is the most overlooked part of a home theater, and in our opinion, one of the very most important ones.  Your room has a huge impact on the final sound.  Some rooms start out better than others as they might have lots of soft surfaces and carpet to absorb reflections of sound.  Others have bare walls and hard floors and need a lot of help.

A well-designed acoustic package for your home theater will make a world of difference in the audio quality, especially in dialog intelligibility.  The good news is, you do not have to spend a ton of money to get the job done.  You can purchase acoustic panels for a reasonable price if you are willing to install them yourself.  

Think about allocating 5-10% of your budget on acoustic panels, it will be well worth it!

Explore our guide to home theater acoustics to learn more.

Electrical Needs

Like acoustics, this is something many people forget. In some neighborhoods, the AC power coming out of the wall can be weak or dirty. This may require some type of AC line conditioner.   Or if you live in an area prone to lightning strikes, it might be wise to invest in a unit that also offers surge protection.  

You may also need more power for all of your gear than one electrical breaker can provide.  Be sure and research the total power needs of all your gear and make sure you think about the cost of an electrician adding a dedicated circuit.

None of this should be more than 5-8% of your budget, but it is something to think about.

Home Theater Cables

The home theater world does not completely run on wi-fi yet, so you will need cables for many components.  There is a big debate over speaker wire making a substantial difference, but whatever your belief, the laws of physics say you need a large, heavy-gauge wire for longer runs.  

Also, the HDMI cables need to be able to support the latest HDMI format of the day.  If you need to run a long cable from your home theater receiver to your display, make sure the cable meets the spec for the distance, sometimes these can cost more than you might expect.

The longer distances you need to run your speaker wires and HDMI cables, the more you should budget.  If you plan for 5-10%, in most applications, you will be able to get good quality.  And like speakers, the speaker cables will not change much, while HDMI cables certainly will.  Consider that fact when you are thinking about cutting back to a smaller gauge speaker wire to save a little; don’t do it!

Home Theater Add Ons

These items are by no means must-haves you absolutely should include in your budget and you can certainly have a great immersive experience without any of them, but they can add a cool factor to your room.  You might want to think about these as you build out your dream system

Smart Remote
Sure, you can operate your system just fine with a table full of remotes or a bunch of apps, but an all-in-one remote will make things a lot easier.

Smart Lighting
If you take the smart remote step, consider adding smart lighting control so you can dim the lights as the movie starts, this is definitely high on the cool factor scale. 

Movie Objects and Posters
Add a theme to your theater with signs, props, life-size mannequins, and more. These can add up, but also are great to buy later as your budget permits.

We hope this brief overview of how to allocate your home theater budget has helped.  For more information, be sure to check out Home Theater Central!

Please feel free to reach out to us via phone, chat, email, or drop by one of our stores in Raleigh or Charlotte, NC.