The holiday season can be the most financially difficult and stressful time of the year. Planning your spending before you shop and sticking to a budget can keep you from suffering a post-holiday credit nightmare.

Think about that Department store credit card with a balance of $500 and an interest rate of 21%. The interest on that card is $105 per year, plus late charge and over the limit fees. If it takes you only 10 years to pay off that $500 department store credit card, you've given away $1050 just to pay for interest. The average American family has 8 credit cards and carries $17,000 in debt at 18.9% interest. That average family throws away over $3200 each and every year.

That interest payment does nothing to reduce what you owe. The amount of your debt does not decline at all by your paying interest on the balance.

You can avoid the pitfall of debt by carefully preparing your holiday budget and deciding how much you can afford to spend. Write down each person on your shopping list and determine, in advance, exactly how much you can spend on each person. When doing your shopping keep to your budget and think about the best gift you can get for your budget rather than focusing on getting a gift regardless of cost.

Some of the most inexpensive gifts are the most cherished. For family members, consider making clay hand-prints of children or photo refrigerator magnets. These gifts are some of the most personal and are sure to be enjoyed for years to come instead of sitting in a closet collecting dust.