Continuing with the 4-part series on Women and Money, today let’s look at money leaks. If you missed the first part of the series, you can read it here: What Are Your Money Habits?

A ‘money leak’ is anything that takes money from your pocket, wallet, purse, salary, MPESA or bank account. It is where your money goes after it leaves you.

Getting money is one thing; keeping it or keeping track of it is another. It also gets harder to keep track when you use cards, cheques and MPESA to make payments instead of cash and don’t take time to evaluate your spending or statements.

MPESA further complicates things because you can now transfer money from your bank account into MPESA, which increases your chances of spending when you don’t have cash on you.

On top of all these, the media is inundated with adverts telling us how we cannot live without this or that; and financial institutions are offering all sorts of easy-to-access loans, especially for salaried people. It’s easy to get sucked into the hype and keep buying on credit without thinking about the future repercussions on your finances.

What are your money leaks?

  1. For the next 30 days, carry a small notebook and note down everything you spend money on. Write simple descriptions in this notebook each time you remove money to pay for something using cash, cheque, MPESA, or any other method. Examples of descriptions are: fuel = 1,000/-; phone credit = 500/-; bus fare = 100/-; lunch = 500/-; tip at restaurant = 50/-; loan to XXX = 10,000/-; rent = 30,000/-; househelp = 8,000/-; MPESA fees = 55/-, groceries = 2,565/-, furniture purchase = 25,000/-, etc. Note down everything no matter how minimal the amount is. Write these descriptions vertically and leave some space between each ‘receipt’. Also ensure that you note down all MPESA transaction and bank fees (including ATM withdrawal fees).
  2. At the end of 30 days, cut out each of the ‘receipts’ and put them into general categories such as meals, entertainment, transport, telephone, groceries, car repairs, furniture purchase, etc.
  3. Total up these categories and you’ll then have a clear idea of your expenses or leaks for that month.
  4. For a more accurate picture of your finances, do this exercise for 3 consecutive months, sum up your spending for these 3 months, and get the average. This average is your monthly spending.  When I conduct this exercise with my coaching clients, most get surprised when they see how much money they spend frivolously each month. Interestingly, those in financial services are no better off than those who are not. Personally, I did this exercise for 3 months and once I totalled up my categories, I got a shock when I realized how many unnecessary expense categories I had!
  5. You need this information today, so don’t wait until the new month to start the exercise; start it today.

For married women, I suggest that you conduct this exercise with your husband if you can. When doing it as a couple, first make a pact not to judge each other and to be 100% open about your spending. And when you find out the unnecessary leaks, don’t blame each other. Instead, use the knowledge to start plugging these leaks.

What next?

Once you have found out your main spending categories, it’s time to create a budget. For the budget to be more effective, you’ll need to create it before your money comes in. This ensures that the money coming in at the end of the month will find a new direction because unallocated money always gets wasted.

If you’re finding is hard to keep track of your money, find an app or program that you can download to your phone, tablet or computer and use it to track your spending.

As women, we learn best from each other so I invite you to share your experience and main money leaks in the Comments section below.

Image credit: Stuart Miles at


You can read the other articles in this series here:

Part 1: What Are Your Money Habits?

Part 3: How to Create a Budget That Works

Part 4: Women, Money and Relationships

Caroline Gikonyo
Caroline Gikonyo

Caroline Gikonyo is a Life and Business Coach at Biashara 360. She's an avid blogger and also oversees our content creation. This ensures that we give our readers quality and well researched information and tips.

Please share your Comments below