If you already have a dining room, I'd probably remove the mini peninsula in favor of a good island with seating..looks like there is space. I would WANT also: new flooring....a fridge.... one side at least of the brick short column removed. So the first thing I'd do is price out hardwood floor as a DIY install. I'm not sure between flooring and an island and new dishwasher, if your budget can swing it.....maybe just maybe with Ikea used on the L area , but there is counter, new sink/etc, if you pull out the L. This is a case where "leave it as is" until your budget grows so you can do more things.

You could try Craigslist for cabinets. Ready To Assemble cabinets (RTA) are another option. Bargain Outlet has nice ones, if you happen to have one of their stores nearby. There are other companies online from which you can order RTA cabinets. Friends of ours just ordered ones from Conestoga, but I'm not sure whether they're in your price range or not.

The good news is that the cabinets are already painted white, have a charm of their own, and are probably solidly built, from the looks of things. So, other than the lack of DW, it looks pretty livable if you choose to wait longer and save more $$ for the transformation.

We have friends with large families (7, 10 kids, respectively) who choose to live without the DW. It can be done. They like how close their families have become while doing this chore together on a daily basis. Living with out one seems "different" today, but it's not all bad if you decide to wait on that appliance. : )

Is that the only eating area? What are the brick things?

For less than 5k, you can take out the brick half walls and put in full height cabinets, narrowing the opening a bit. That gives you a lot more storage. Putting in a dishwasher means taking out a cabinet next to the sink. I can't tell exactly how big it is, but there are 18" dishwashers that might work. There are also portable dishwashers.

I would keep it simple. Once you start ripping out whole banks of cabinets, replacing flooring, etc., you are likely over your budget, so stick with basic upgrades for now. Good luck.

What's next to the fridge space? And what's the side on this side of the brick half walls?

I think you have a charming, vintage kitchen. I like scone911's idea. You could put in a solid pantry wall or display cabinets with glass on both sides. I think the latter would be better for sightlines and for light to flow through the house. If you need some pantry storage or storage for non-food but non-pretty things, make the bottom of the storage solid and the uppers glass. Then live there awhile, get a feel for how you use your home, and what you like and don't like about the kitchen area, and save up for a bigger budget.

Just for reference, we are doing a budget remodel in our small kitchen. We are reusing/repurposing some of the current cabinets and bought extra cabinets used from a re-store. We didn't have to replace any flooring. And we are doing budget countertops. Yet, we are still going to be spending more than $5k due to upgrading electrical, adding outlets and lighting, adding plumbing and an extra sink, etc. This also includes increasing insulation in the walls while we have them torn down to studs and new walls and upgrading a window. This is all DIY, so no labor costs.

Thank you for all the feedback everyone! On the other side of the brick walls is a dining room (pretty good size) so I don't think we necessarily need the eat in area. On the other side of the fridge space is a small pantry and then there is a door in the corner leading to downstairs. One of the brick 1/2 walls has empty storage underneath (that probably could be removed) and one has some sort of heating element inside that looks like it can't easily be removed? I can't decide if I like those brick things or not? Initially I wanted to take them out.

We are leaning toward: removing the peninsula, installing the DW next to the sink where the peninsula was, making an L-shaped kitchen keeping the existing cabinets, and then putting in a large island in the middle (perhaps with seating for a breakfast nook). We would have to redo the floors and would like to do hard wood laminate and add a new countertop (dark wood) and leave the cabinets white. We are also buying a used set of DW, fridge, stove, microwave and oven (all white) for $500 from friends who are upgrading to stainless steel. So hopefully we can save big on the appliances until we are ready to buy new ones. Think this is all doable for $5k?

Another option (much cheaper I think) would be to leave the peninsula as is, install the DW in the peninsula side (around corner from sink) and put in a new countertop (larger) that would hang over and then add stools on the other side for a breakfast nook. We'd then leave the floors the same for now and leave the brick walls. ?

For a short term fix, could you put a dishwasher where the range is, the range where the fridge goes and tuck an IKEA pantry and a fridge across the way over in the breakfast nook. I really like the above suggestion to put a bar height table against the existing peninsula.

Or you could just get a portable DW or 2. :) They cost about 200 on CL around here. That's what I did while deciding what to do with the kitchen. Bonus they have cutting board tops. Instant extra counter space.

Very important question...are those cabinets standalone cabinets with 4 walls and each one a separate box? In the 1950s & early 1960s, cabinets were site-built as one big box across an entire wall with, usually, the cabinet "back" the actual wall of the house and separator walls added to attach shelves and/or drawers. If they are all one big box, it will not be as easy as taking out a cabinet.

My parents' 1960s rancher has exactly as I described!

If you can live w/o a DW for a while, I suggest you live with the kitchen as-is for a few months to see how it works overall. You might find that it needs more than a cosmetic upgrade.

What condition are the cabinets in? Are the drawers working well? (In the 1950s/1960s, they were often wooden drawers on wooden "runners", which can become difficult to use over time.)

What condition is the countertop in?

It might be worth it to save $$ for a while to do a more extensive remodel. If it were me, I wouldn't want to spend $5,000 and then have to redo everything in a couple of years and spend even more $$ - with the $5K work having to be torn out.

As mentioned above, some RTA cabinets are quite reasonable - including the highly rated IKEA cabinets.

What kind of heat do you have? It looks like heat base boards under the Windows which could limit your options. We took out a half wall with hydraulic heat baseboards so it is possible to move or adjust the size with hydraulic but that will be an expense and not usually a DIY project.

You might be able to get rid if the soffits and go with taller cabinets. I hoped to but the roof line didn't make that an option for us.

I had big ideas when we first moved in but lived with things for a bit. Most of my ideas ended up involving major reconstruction which wasn't in our budget. When we re-did the kitchen I did the best I could with the space we had.

is rhere an entry door to the left of the table?

I really like the L-shaped kitchen idea. I am not so sure about the overhang where people would be sitting facing into the kitchen with their back to the windows. I don't think they would appreciate it. You could have an L-shaped kitchen with a bit of an island in it.

If possible I would try to remove those brick things.... Or at least remove the brick (in some parts of the country brick is really desirable but not where I live)

Before you do anything you need to find out what the heating thing is inside the brick that may definitely change everything that you want to do. If the heating thing is not in use, then you would want to remove it and all of that brick work but that is a more expensive fix because you will probably have to redo the floor and walls.

You will need to think through very carefully the order in which you do things.

I'm with those who say move in and live with it for a while and then see what you think. I had a portable dishwasher for years it's not a bad alternative but I wouldn't want to live with it for longer but I had to, so I would set a time period as to how long you are going to live with it-three months or six months and then make the changes.