June is the favorite month for marriage, according to
TheKnot.com and WeddingChannel.com. That's the good news.
The bad news is that 53% of marriages end in divorce,
according to the latest Centers for Disease Control and
Prevention U.S. marriage and divorce rates.
Experts caution that there are many ways to crunch those
numbers. But the basic prevalence of divorce stands out.
And disagreements over how to handle money are a leading
"Talking about your finances is the way to avoid those
disagreements," said Richard Gotterer, managing director and
senior financial adviser of Wescott Financial Advisory Group, in
its Coral Gables, Fla., office.
Anja Winikka, editor of TheKnot.com, said, "Talking basically
Some key points:
A key first step for couples and couples-to-be is to level with
"You've got to tell each other how much you earn, spend and
owe," Winikka said. "You've got to be honest about debts,
including student loans -- and any problems stemming from your
Understand your partner's attitudes.
If one of you is a spender and the other is a saver, that can
become a problem later. If you don't acknowledge that difference,
tension is more likely. "Talk about it early so it does not
become a wedge issue later on," Gotterer said.
"Talk about where you want to end up," said Joe Duran, CEO of
United Capital, a Newport Beach, Calif.-based firm whose website
includes Honest Conversations, an interactive tool that helps
couples understand their money biases.
Develop a strategy.
This is your action plan for reaching your goals. It can cover
everything from buying a house to annual vacations, paying for
your children's education and retirement. This is where you come
to grips with how much money each goal will take, and how much
you need to set aside each year to achieve those targets.
Set up a rainy-day account for emergencies and an estate plan.
"Even at a young age, you should write a will and create durable
power of attorney, a health care proxy, and designate a guardian
for your kids," Gotterer said.
Make a budget.
This goes hand-in-glove with forming a strategy -- your financial
game plan. This shows you how much you need for essential
expenses and discretionary ones. It is a key tool in prioritizing
-- deciding what you can afford, what you can't and what must be
Decide whether to pool all of your income in a single
Many two-income couples prefer to have one account for paying
household expenses, and then two additional accounts for each
spouse's discretionary spending.
"There are pros and cons to each approach," Winikka said.
"Having that conversation is what matters."
One off-shoot of that chat: deciding whether you want one
person to be the family treasurer, cutting all household checks,
or whether either of you can pay bills.
Create one if you have assets, income or family wealth that would
need preservation in the event of divorce.
For a prenup to be enforceable each partner must have counsel,
both sides must fully disclose income and assets with value.
"Let your attorneys work out the details, including which
things will be covered and whether you want provisions for
compensating one spouse based on length of marriage," said Steven
Goldfeder, a partner in the matrimonial department of New York
law firm Blank Rome.