Cash Smarter

April 14, 2016  by: Aaron Crowe

Financial Lessons I Learned From My Contractor

Financial Lessons I Learned From My Contractor

We’re at the tail end of a bathroom remodel in our home, and like anyone who has had a contractor take over an important part of their home for a few weeks, I’ve learned it’s not something I want to do often.

If you’ve dealt with a contractor or construction crew in your home, then you probably have a horror story to tell. I’m not here to tell you our horror story. Delays and mistakes are common in dealing with anything as big and complex as a house.

As a personal finance freelance writer who almost always considers things from a personal finance perspective, there were some financial lessons that our contractor inadvertently taught us. Among them:

Low prices are low for a reason

I used an app called Thumbtack to find professionals to come to our house and give us a price quote after reviewing the job and our needs. Of four contractors who responded to my request through the app, one didn’t get back to me, one offered an exceeding high price for the size of our small bathroom, one offered a fair price, and one didn’t meet our deadline for submitting a bid.

Which contractor did we pick? The one with the lowest price, though with only one other contractor providing a price, the competition wasn’t fierce. But after contacting references, I was confident he was a good choice.

But then his low price, which didn’t seem alarmingly low and was a fair, started to make some sense. He wasn’t as organized as I expected someone to be who was in charge of multiple things being replaced in a bathroom. A few things weren’t measured correctly.

A few too many times he asked me to again tell him what type of faucet we had for the vanity he ordered for us online. Because he didn’t check how many holes the sink had for the faucet, he had to return to the hardware store to get the right one because he bought one that didn’t fit.

I realize that it’s part of doing business in construction to have to make multiple trips to a hardware store for things to fit right, but this type of error happened a few too many times. I doubt if this was unique to our contractor, but his almost daily errors made me think that he charges a low rate for a reason.

Do the job right the first time

While mistakes do happen, doing the job right the first time pays off in a few ways: money and time. This goes for any profession, from construction to writing to everything in between.

Our contractor, it turns out, had a bit of bad luck during our project. Or maybe he didn’t supervise his employees closely enough.

At least four parts of the bathroom remodel had to be redone because one worker who started the task didn’t do it correctly the first time. Another worker had to step in a day or so later to redo the work, or at least a big part of it, because things weren’t working out.

That cost the contractor money (though not us), and it cost everyone time. A job that he thought would be done in a week took almost two weeks to finish. There are still a dozen small things left to finish, though the major components seem to be working fine so far.

Don’t pay contractor too early

We put 10 percent down when the contract was signed, and paid for the supplies before the job started — which was fine and seemed fair. The final half of the payment was due upon completion.


Contractors, like everyone else, want to get paid when their work is done. But they have another incentive that other professions don’t — their workers are paid weekly.

This gives them extra incentive to finish your job quickly to your satisfaction. If they’re waiting on payment from a customer, they’ll have to float some of the weekly pay to their workers or get it from other projects being finished. This is also why contractors juggle multiple projects at the same time — ours had three projects going with ours.

Because our project ran into two weeks instead of one — and because his workers are paid by the job and not by the hour — he asked me to pay half of the final amount before the project was completed. And by completed I mean that everything was done to our satisfaction and that every task listed on the contract was completed.

This wasn’t the case. A dozen small items remained to be done, and since the partial final payment wasn’t part of the contract, I declined to pay it. I’d pay, I told him, when the job was fully completed.

Half of his contract is sitting in our checking account, giving him incentive to get the replacement parts needed to finish the job.

Repeat customers are the best

As a freelance writer, I realize that repeat customers are important. Having them allows me to have a steady flow of work and I don’t have to work as much to find other income.

Our contractor reinforced this lesson. Like many homeowners, we have a wish list of projects we’d like to get done at our home. Some are big and some are small or somewhere in between. They all cost money.

Like finding a good auto mechanic, a great contractor who is honest and does the job well and on time is worth hiring for multiple projects as you can afford them. Is the contractor we hired for our bathroom remodel that person? I don’t know yet, but probably not.

It’s not that I don’t like him and don’t think he would do a good job on the next project we have in mind. I’m just not too confident in his ability to pick a crew.

All of the above mistakes aside, his weak crew of workers was a little worrying. Not for the quality of their work — because if mistakes were made they were quickly caught and fixed by someone else. But because of their work habits that caused delays.

A few sloppy habits convinced me that they didn’t completely care about customer service and having me back as a repeat customer:

  • Garbage left by the crew was picked up one day by one worker, but left the next day by another.
  • One worker vacuumed the stairs leading up the bathroom one day, but the next day it didn’t happen.
  • After more than a week without a working toilet upstairs, two workers didn’t go the extra mile at the end of one day to get a part at a nearby hardware store that would have quickly solved the problem and got it working.

Those are the main financial lessons I learned from our contractor. I expect I’ll learn a few more before the final payment is made.

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