1) You want to be pretty careful about ceiling clearance. How long are your kids going to be able to stand in the space? Kids grow quickly. Some girls are pretty close to their adult height before they are out of middle school.

2) Garages often have no heating and not-tight garage doors. The space may be expensive to heat in the winter.

3) Attics tend to hot in the summer.

4) Unless you put in skylights or dormers it will be pretty dark, particularly in winter.

So, you want to look hard at how much usable space you will get and how many months of the year it will be usable.

Dormers or skylights will help with heat in the summer. A shed dormer might add some usable square footage. Pick a relatively low ceiling height and measure the width of the room with it. Remember, you'll have to put in insulation in the ceiling.

Those look like 2X4s holding up the floor. If that is so, is it strong enough for a floor for a living space?

Aside from the size constraints, it looks like you'll have to greatly improve the floor structure ( which will lower ceiling height), provide adequate fire separation from the garage, insulate the heck out of it, and figure out how to heat and cool it. I'm not going to guess on cost, but it's going to be a pretty expensive play room.

IMO 20K won’t even begin to cover what needs to be done and IMO 50K would be a waste of money for a space the kids will grow out of very quickly.

Once you put in flooring and finish the ceiling, the space will be 8 ft height even at the peak. Very little of this space will be usable for long, even for children. On resale, you won't be able to list this as square footage of the house. That will only change if you put a roof dormer across the space on one or both sides.

If you want to use it as a play area or toy storage, I'd put down an indoor-outdoor carpet in the space and let the kids play there when the temperature of the space is comfortable. Don't run the car in the garage, to prevent fumes from entering the space. Be sure the electric light fixture installations are safe for them if they decide to explore them - you may have to put the wiring in a safe conduit.

75K as a start to tearing off the roof enough to get a big shed dormer on both sides that makes it actually usable. It won’t be at all usable the way it is. At that point, you might as well just rip off the top and start over. .

And that 75K is if every bit of structural

doesnt need to be replaced, including the foundation below the garage. The windows that you put in with the built second floor or dormers will need to be egress. You’ll need a whole lot of electrical. You’ll need modern foam insulation for an unvented attic roof assembly. You’ll need a new HVAC to serve that much cubic footage.

If any of this is near a plumbing run, and you don’t add a bath, then you’re wasting the efforts. Add another 40K for that, for a minimal one.

20K Is for the furnishings. Not a construction project like that.