Most basements tend to be cold all the time because they are underground, where the soil is cooler, and they lack sunlight to warm them up. However, finishing the basement combats the cold air that seeps upstairs.
To finish a basement, add wood framing to the walls and fill with either rigid foam-board insulation or fiberglass batt insulation. Top with drywall or another wall sheathing. Tap into the home's heating system to keep the basement warmer. Making a basement into an office, bedroom, or family recreation room is much cheaper than building an addition in most cases.