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After living in my home for three and a half years, it’s finally time to save for a big home renovation. In the years my husband and I have lived here with our twins, we’ve done little things to improve our house, like paint the walls and change the light fixtures. But now we want to add a bathroom to our small bungalow — and that will require some savings.

Right now, all four of us are sharing a bathroom, and as our kids grow, we’re really starting to feel crowded. I know lots of families share a bathroom. In fact, my husband shared a bathroom with his three siblings until he was a pre-teen. So, we’ve tried hard to make our small space work.

What really convinced us to move forward with adding a bathroom was doing research on other homes for sale in our neighborhood. We noticed there was a big jump in price between homes that have just one bathroom and those that have two.

We realized that adding a bathroom would not only give us some breathing room (and stop some fights between our kids), but it would also be a valuable financial addition to our home. Adding a simple, modest bathroom could dramatically increase our home’s value, making it easier to sell in the future.

So, with that knowledge, we moved forward with the steps below. If you’re interested in renovating your home, hopefully, these steps will help you, too.


Step 1: Get an estimate. 

We spoke with two different contractors to get an estimate on the cost of adding a bathroom to our home. We have an unfinished basement, and that’s where we plan to add the bathroom.

Because the space is unfinished, we actually have to add insulation and walls before we can even install a shower, the tile, or anything else. That means this project is a bit different than renovating an existing bathroom. It’ll require some extra work and expertise, but we’re committed to keeping costs low. All in all, including the plumbing required, we think it’ll cost us about $10,000.

This number might seem like a lot to some and too low to others. And, we know adding a bathroom to a basement could cost significantly more than this. However, we plan to save money by hiring a friend who is a contractor and doing some of the tile work ourselves — plus, I’m also really good at scoring deals!

In fact, I already have a sink and a light fixture that I found on Facebook marketplace in my garage, just waiting to be installed in the basement.

So, we’re being very careful not to overdo it, because again, we are living in a small home. We don’t want to over-improve our space or spend lavishly, because we want to keep this new bathroom in line with our modest home in our modest neighborhood.

Step 2: Save money in a savings account.

The next step after getting an estimate is to start saving money in a separate savings account. I love saving up for big projects ahead of time versus borrowing money or putting it on a credit card. To me, it’s more financially empowering to have all the money saved before starting a renovation. It also makes the process less stressful for me.

I’ve been using Ally Bank’s online savings accounts to save for my goals for many, many years (way before I ever partnered with Ally for work!) I’ve always loved these online savings accounts because they allow you to rename them to show exactly what you’re saving for.

Now, Ally Bank has a completely new tool in their Online Savings Account that I’m really excited about called buckets. Here’s how it works: I can create an online savings account called “Home Renovation Projects” and put several savings buckets inside of it, labeling them things like “Fix the Deck,” “New Roof,” or in my case, “Bathroom Renovation.” Or, I could create an online savings account just for my bathroom renovation and use the buckets inside of it to organize things like “Plumbing Costs,” “Tiling,” or “Decorations.”

The buckets make it a lot easier to organize your savings goals and track your progress. They also make the journey of saving up for a big goal a bit more fun.

Step 3: Stick to a budget. 

Once you have an estimate for your renovation project and you’ve opened a savings account for it, the last step is to stick to a regular household budget.

To me, sticking to a budget means living within your means. It means putting your financial goals first, above everyday wants. So, now that I have a bucket for my bathroom renovation, I’m a lot more motivated to stick to my regular household budget. It’s helpful if you have an end point in mind. For us, we’d love to have this renovation completed this year, and putting a timeline on it makes it more of a savings priority.

Honestly, just seeing the bucket when I log into my Ally Bank account encourages me to watch my spending. So, we’re not going out to eat as much, and we try to add to our savings account every single month.

Final Thoughts

It’s going to be amazing when we finally save up enough money to start this project, and let me just tell you, I’m already calling dibs on the new bathroom.

My husband and kids, as far as I’m concerned, can keep enjoying the old bathroom, because I’m thinking that new one is going to be for me – for Mama! I truly can’t wait to reach this goal. It’s always so empowering every time I meet one of my financial goals, and as I mentioned previously, there’s nothing I love more than saving up cash ahead of time for big projects.

I’m looking forward to seeing my savings bucket grow, and post-renovation, I’m looking forward to my home growing in value. This means we’ll build more equity in our home, which will enable us to have more financial flexibility when it comes time to sell in the future.

If you want more information on how you can organize your money with savings buckets, please visit Ally Bank’s Online Savings Account. For more personal finance tips, visit my website at

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Headshot of Catherine AlfordCatherine Alford is a nationally recognized financial educator who partners with top brands to encourage, educate, and inspire people to take on a more active financial role in their families. She is also the founder of, an award winning personal finance blog that she created in 2010.