You've purchased a home with a "finished" basement, which translates to inexpensively paneled walls. A full remodeling project may be beyond the budget, but there is hope with some moderate changes.
Basements tend to be dark, so first address the walls. Paneling can be painted if you use a good multi-surface bonding latex primer (clean the paneling with a mild detergent first). Choose a light-color acrylic or latex paint and let the natural character of the vertical panels show through (it will go from "yuck" to "charming" before your eyes).
Depending on your intended use for the room, update curtains, flooring, and furniture as appropriate. Install recessed lighting or make room for plenty of table lamps to add warmth and a cozy glow.