#90 Bad Communication = Expensive

We hired a contractor to renovate our house. It's a pretty big job. We are changing all the flooring, the kitchen countertop, backsplash, and sink, complete redo of the main washroom, making new closets, stair railing, and light fixtures. 

Our original budget was $30,000 when we walked through a first viewing of the house, but that has quickly changed. Our first quote was $47,700, which we negotiated down to $46,000. But since work has started the additional costs have continued to roll in. Changing a window, $700. Adding more backsplash, new baseboards, and bathtub wall tiles start to add up. The grey paint we chose turned into grey-blue, so that cost another $220 to buy new paint. The total cost is now $48,520. Clearly way over budget, but these changes are absolutely necessary.

But the costs don't stop there, we had to buy our own light fixtures, and door handles, vanity and mirrors, dishwasher, and of course the not so perfect towel rack.

Bad Communication

** This image has nothing to do with the quality of the phone **

Bad Communication Is Expensive

My contractor's English is not the greatest. So sometimes when he asks me to buy something, he's not very clear on what it is I need to get. And I've never done this reno thing before so I don't know what questions to ask.

My contractor put an extra door where I did not expect a door to be and this required an extra door handle. The wholesaler I bought the door handles from previously is an hour drive away, and since I don't have a car it's quite inconvenient for me to buy another one. 

So I ordered the door handle online from a different wholesaler, but the shipping cost was as much as the product cost. I figured it would be ok to pay to make sure all the door handles are the same in the house. 

My contractor called me today and told me I ordered the wrong door handle. He needs a passage door handle, not a dummy door handle. I'm pretty peeved about this since I can't return the dummy door handle without incurring more cost than it's worth to me in a refund. And now the new door handle is going to cost me $60 including the $20 for shipping.

Ok, rant over.

Moral of the story.

1. Bad communication is expensive.

2. Learn from doing and don't make the mistake again. Learn to ask the right questions. 

 

I'm reading a book called Switch By Chip and Dan Heath, in it is a story that goes like this.

In the 1960's, an executive at IBM made a decision that ended up losing the company $10 million (about $70 million in 2009 dollars). The CEO of IBM, Tom Watson, summoned the offending executive to his office at corporate headquarters. The journalist Paul B. Carroll described what happened next:

As the executive cowered, Watson asked, "Do you know why I've asked you here?"

The man replied, "I assume I'm here so you can fire me."

Watson looked surprised.

"Fire you?" he asked. "Of course not. I just spent $10 million educating you."

 

Thankfully my education only cost $40. But in life, there are lots of lessons like this where your mistakes cost money. As long as you learn a lesson from your mistakes and grow because of it, the mistake isn't all that bad.

 

Save Money Retire Early is written by Jon Lo, a barely 30 something Chartered Financial Analyst. I believe anyone can be rich or poor, it's what you save that makes the difference.

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