Delicious Ham and Potato Soup (or bacon and potato soup)

Made this the other night!! Was so good!! Leftovers the next day was even better!!

Makes enough for about 4-5
3 1/2 cups peeled and diced potatoes (I used red potatoes, but I'm sure russet would be great too)
1/3 cup diced celery
1/3 cup finely chopped onion
3/4 cup diced cooked ham (I did bacon and it was great too)
3 1/4 cups water
2 tablespoons chicken bouillon granules
1/4 teaspoon salt
1/2 teaspoon black pepper
5 tablespoons butter
5 tablespoons flour
2 cups milk

Combine the potatoes, celery, onion, ham, and water in a pot. Bring to a boil, then cook over medium heat until potatoes are tender, about 10-15 minutes. Stir in the chicken bouillon, salt, and pepper.
In a separate saucepan, melt butter over medium-low heat. Whisk in flour, and cook, stirring constantly until thick, about 1 minute. Slowly stir in milk as not to allow lumps to form until all the milk has been added. Continue stirring over medium-low heat until thick, 4-5 minutes.
Stir the milk mixture into the pot. (If doing bacon put the cooked bacon in at this point.) Cook soup until heated through, and enjoy!!!