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Don’t let money bust up your marriage

  • Finances rank as the biggest trouble spot for relationships.
  • Experts recommend exploring money matters before tying the knot.
  • Preparing for marital finances includes updating beneficiaries and considering disability insurance.

October is one of the most popular months for weddings, and thousands of couples will be taking the plunge and counting on becoming happily ever after.

If you and your betrothed are among them, you've probably already explored each other's attitudes about religion, politics and other sensitive topics. Yet have you ever really talked about your feelings toward money?

"Money can be a huge source of conflict in a marriage," said certified financial planner Christopher Krell, a principal with Cassaday & Co. in McLean, Virginia. "It should be as important a discussion before marriage as whether you want children or where you're want to live."

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Roughly 2 million marriages take place each year, according to the National Center for Health Statistics. At the same time, there are about 800,000 divorces or annulments.

The leading cause of stress in a relationship is finances, according to a 2015 study by SunTrust Bank. The research found that 35 percent of people named money as the primary trouble spot with their partner.

Here are some financial tips for couples heading down the aisle to avoid problems down the road.

1. Have the money talk

Start by discussing what money means to each of you and what your goals for it are. If one of you is inherently a saver and the other a spender, conflict will likely develop without an understanding.

Learning how to talk calmly about finances now with your partner can prevent arguments in the years to come. "It's critical to be able to have a healthy dialogue about money and keep emotions at bay," Krell said.

"Some people don't want to explain why they spent money on an extra round of golf or went out to dinner with friends." -Christopher Krell, certified financial planner

2. Create a budget

Once you agree on goals for your money, you have to figure out how to reach them. That means prioritizing how you spend and save. Whether you combine your finances through joint accounts or maintain individual ones (or a combination of the two), make sure you both are on board with sticking to your plan.

Some couples include separate spending money in their budget so that each person can splurge without having to justify the expense to the partner. "Some people don't want to explain why they spent money on an extra round of golf or went out to dinner with friends," Krell said.

3. Discuss debt

There's a good chance that at least one of you is bringing debt into the marriage. While student loans often come with hefty balances, credit cards — which can come with interest rates higher than 20 percent — should be a payoff priority in your budget in a way agreeable to both of you.

The sooner you can eliminate your high-cost debt, the sooner you can reach financial goals like purchasing a house or taking a special trip.

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4. Start a nest egg

While you might not be at the point of deciding exactly what you want retirement to look like, you can be sure you'll need income after your nonworking years. With pensions largely going by the wayside, retiring comfortably will be based largely on how well you save.

If you have access to a 401(k) plan or other workplace retirement plan, the goal should be to max out on your contributions as soon as you can. (Some advisors recommend paying off credit-card debt before putting anything into retirement savings.) For 2017, the maximum is $18,000 for 401(k) contributions (and an extra $6,000 catch-up contribution for those age 50 and older)

If you can't afford to max it out, try to at least contribute enough to get any matching company contribution available. "Otherwise you're walking away from free money," Krell said.

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5. Update account beneficiaries

When singles sign up for their 401(k) plan, they often name a parent or other family member as the beneficiary of their retirement savings. It's important to update those designations on all financial accounts that ask for one, because whoever is listed generally would get the money in the event of your death, no matter what a will says.

"When you get married, you have to take care of each other," Krell said. "Making sure your [partner] is your designated beneficiary is the first place to start."

6. Consider disability insurance

While many new married couples consider getting life insurance, Krell said they are more likely to need coverage for disability. When you're healthy, it's hard to imagine being unable to go to work. Yet an unexpected medical event or accident can lead to months — if not years — of being homebound or disabled.

Policies for short-term disability, which maternity leave is typically covered under, or for long-term disability are often through the workplace. "If you can get it at work, take advantage of it," Krell said.