10 smart ways of spending this festival season

2009 is almost coming to an end with just Diwali, Christmas and of course the New Year left to celebrate. Festival spending is always a source of a lot of emotions anticipation and excitement on one hand and stress on the other. Here are few tips to only enjoy the first and remove the latter from your festival spending in 2010.

1. Total the entire expenditure you have incurred during this festival season. Estimate and add for Diwali, Christmas and New Year as well. Remember to include all possible expenses which are not the regular and usual monthly expenses and can be linked directly or indirectly to the festivals. Add another 10 per cent to 15 per cent to this amount and you have a figure which is the likely festival expenditure for next year.

2. Now instead of burdening the savings in the months of October, November and December; ideally you should put aside some money from your savings every month towards this festival estimate, starting from January 2010. Thus you end up with a festival fund by the time the festival season starts without having to take loans or depend on the cash gifts or bonuses coming your way.

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3. Now the entire bonus and cash gifts which you will receive next year is available to be spent in any way you like. But remember to invest at least 60 per cent of this. Especially now with the way that the Indian stock market is performing and is expected to perform over the next few years, equities would be one of the better performing assets.

4. The gifts in kind which you have received, take stock of them. Only keep the ones that you really need or which you want to retain due to sentimental reasons. Reuse the remaining over the next year in gifting to friends and relatives do take care to not gift it to the person from whom it has come from in the first place!

5. Depending on the intimacy you enjoy with your friends and families, discuss what exactly you would like them to gift you for next year and you do the same. It will save everybody from unwanted gifts.

6. Make a list of things that you want to buy over the next 12 months (including the gifts you want to pick up for friends and relatives) and keep looking out for bargain offers and genuine discount sales on these items. Dip into your festival fund and buy these items if a good sale is on. This works well especially for clothes and household and electronic items. But do not get carried away... don't fall into the trap of buying stuff just because it is on sale and not because you have a genuine need for it.

7. Gold or rather jewelry would figure as an important item on your list. Track gold prices and buy solid gold when the prices are low or expected to peak soon. Then use this gold to get ornaments made during the festival. Gold prices are likely to be higher during this season also because this is the big wedding season.

8. Alternately for those of you who are looking at buying gold more as an investment, an interesting and rewarding option is through Gold ETFs -- either lump sum investment or even a SIP into the same. Gold is a good investment as a hedge against inflation, stable value in the event of political uncertainties and its traditionally negative co-relation with other asset classes such as stocks, fixed income securities and commodities.

9. A more meaningful way to do charity besides contributing in cash and kind to the orphanage and/or old age home would be to actually visit it along with your children and spend some time there.

Help out with some activities like book reading. It would a valuable gift you will be giving not only to the residents of these homes but also to your children by teaching them to help the unfortunate and to appreciate what we are fortunate enough to have.

10. Remember to allocate a part of the festival fund to the 'delight' factor. This would be fun time spending for your family. Something over which you will not ponder or stress but simply enjoy!