What I would do instead is replace the counter, sink and lower the raised counter to counter height. I suggest a beautiful soapstone counter, stainless steel sink and faucet and install the lower cabinets with stainless hardware instead of the knobs. It will look great.

Here's a sample of wood cabinets and soapstone counter.

I agree with the not painting part It will cost more than new cabinets if done properly and I never suggest DIY painting of good cabinets that you are going to have for a long time. Lower the raised counter , new counters if you love the kitchen as is and we need to see the backsplash before any idea of paint color for walls If it was my kitchen I would get rid ot the cabinets hanging down over that bar area,Lower that one silly looking raised cabinet beside the window it makes no sense at all.Maybe better lighting I don’t know but usually always needed.And of course new stainlless sink and faucet.

I seriously hate the color of the cabinets. I thought I would start with that so it would make the biggest impact. We just got done remodeling our bathroom and have a lot of leftover tile. I was thinking I would use it in the kitchen...

If you hate the color of the cabinets paint them, but it's not going to achieve an updated look on its own.

In what way do you want to use that tile? As a floor or a backsplash? Because IMO it won't look good in a kitchen. It screams "bathroom".

I was thinking of just a backsplash but have the tiles cut and arranged in a herringbone pattern.

That's going to be WAY too busy. Plus, by the time you pay for the labor costs of cutting that tile and getting it installed, you could have just bought new tile.

Where is a good place to go for tile? I love blues and neutrals. I don’t have it in the budget right now to do a complete kitchen makeover, but would love to make some achievable changes to change something!!! Is it best to start with tile and base the rest of the cosmetic decisions from that?

Yes, the bathroom tile says "bathroom" tile. How about this? Clean the cabinets really good then rub some teak oil on them. That may darken the color a bit. Then, get peel and stick tile and install right over your current back splash. I've seen these tiles and it looks very nice! Easy DIY install. This color you may like and will complement the cabinet color.

Peel and Stick Blue Glass

Change your light bulbs to daylight LED bulbs. Then tell us if the cabinets look better or worse. Have you recently changed your central light fixture or added recessed lights?

You have a 4 inch backsplash already. Adding tile above it will look like an afterthought. If you are going to change the backsplash, pick something you love, then have the 4" part removed before getting the new tile installed.

Absolutely take down the hanging cabinets. I never understood that element in a kitchen.

I have been thinking about taking down the hanging cabinets for awhile. I’ve never thought to lower the bar counter, but now thinking that might be a good idea. With making big changes in the kitchen, what is the best thing to start with? Backsplash, countertop, cabinet color? I am someone who likes to make one change at a time and then makes my next aesthetic decision based on that. I have several pictures pinned of kitchen makeovers I like and all of them are very similar in color schemes.

We recommend you not use the bathroom tiles as your backsplash and the cabinets look very nice. It's best to install a new countertop first if you are going to get on, then a backsplash.

I might also change or remove some cupboards. If you changed some of the fronts to glass, you would get a nice update...with new pulls. I also support you painting the cupboards and using the tile as backsplash... good luck!