How do I make this fireplace look better on a budget?

You can do the faux brick and they have beautiful decorative grate covers that would blend in with the brick or tile, what ever you use to cover the wall. Amazon has the grate covers and I am sure there are other places you can get them.

Hi Rachel! I agree that changing the vent covers would make a big difference above the fireplace. If you want to make your own decorative vent covers, I made one using decorative radiator screen and have a tutorial here: https://www.simplicityinthesouth.com/2013/04/how-to-make-a-decorative-air-returnvent-cover.html

I would do whatever you are wanting to do on the wall, then replace the grate covers with different decorative covers... even use a floor matt cut to size and spray painted,

I think that before you do anything to the wall around the fireplace, you should address the reason for all of the soot on the wall and ceiling. That could be a health and safety hazard. After taking care of that, I'd close in the sides of the insert so that it's a smooth look. If you like the look of brick, you can use the fake brick panels. Brick will make it look dated. And were you planning on doing the whole wall? If not, what were you going to do for the sides of the panels? How about something like this? You could cut the holes for the grates in the wood. I doubt it would cost much more than the fake bricks (between the panels, glue, and what ever you plan on for the edging.

https://www.hayneedle.com/product/richmondmantel.cfm?source=mspla&kwid=FireplaceMantels%20level05&tid=PRL114-1&msclkid=bf3d84ecd192170733aed8bbb7174e04

I am open to any ideas other than brick! Just thought that would be the most straight forward.

This is what I did.

https://www.hometalk.com/diy/living-room/fireplaces-mantels/fireplace-redo-15815323

What other Hometalkers did.

https://www.hometalk.com/search/posts?filter=redo%20fireplace