basement floor

That about describes me. My basement is mostly made of dirt. 5 feet deep in someplaces, 4 feet to 18 inches in others. I want the entire thing dug down to 7 feet from floor joists to basement floor. I have been told that I can save a lot of labor costs if I dig out the basement myself. What I want to know is, how much should I leave around each foundation wall to keep the house from caving into the basement? I am thinking to have a contractor do this - dig it out, rebuild the foundation walls, and pour a concrete slab, will come out to somewhere around $20k. I am not sure how accurate that is. Any comments, suggestions, or advice? Thanks

We are planning on adding a bathroom to our basement but due to the low ceiling level I'm concerned about excessive moisture even with the exhaust fan on. The ceiling height will end up at about 86" when finished. Instead of using water resistent sheetrock would we better to install a cement board or some other product with a vapor barrier to reduce any moisture problems primarily on the ceiling but also on the walls. We are planning on installing a tub / shower combo and are considering a tub with a shower cap to help control the moisture. Thank You.