Tips For Avoiding Marital Money Stress

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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 factor.

"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 means planning."

Some key points:

• Share information. A key first step for couples and couples-to-be is to level with each other.

"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 debt."

• 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.

• Set goals. "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 delayed.

• Decide whether to pool all of your income in a single account. 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.

• Prenuptial agreement. 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.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Mutual Funds

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