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Five Money Talks To Have Before You Get Married

Research shows that it takes married couples longer to recover from money arguments than any other kind. The cure is to talk about money honestly, early and often.

It takes married couples longer to recover from financial arguments than any other kind.It’s summer, and that means wedding season.

(At least what’s left of it.)

Marriage isn’t nearly as popular as it was a few generations back. About half of Americans ages 18 and over — 51 percent — were married in 2012, compared with 72 percent of American adults in 1960, according to a recent Pew Research analysis of Census Bureau data.

Still, more than 50 percent represents a slim majority, and for those about 30, it’s becoming the defining age to start a new life. Pew also found that the median age for first marriage last year was 29.0 for men and 26.6 for women (both the highest since at least 1890).

So if marriage (or even the notion of getting engaged) is on your horizon, it’s time to think beyond china patterns and registry lists.

“One of the most important things for young married couples to do first is come up with a personal spending plan that works for both of them,” says Karen Ramsey, president and founder of RamseyInvesting.com, an online investment management service. “This forces them to be clear about their goals and how they want to consciously choose to spend their money, and not allow it to be spent unconsciously.”

Services such as Ramsey’s may be ideal for young marrieds because her threshold for investment is geared towards those with smaller nest eggs: $50,000 or more. And though it’s not often the kind of subject that comes up in traditional pre-marital counseling, Ramsey and other experts say that finances are absolutely crucial to confront and discuss.

“Arguments about money are by far the top predictor of divorce,” says Sonya Britt, assistant professor of family studies and human services at Kansas State University and program director of personal financial planning.

Last year, Britt conducted a study using data from more than 4,500 couples as part of the National Survey of Families and Households. Her study, “Examining the Relationship Between Financial Issues and Divorce,” found that no matter the couple’s net worth, it took longer to recover from money arguments than any other kind — and such arguments are more intense.

“Few people speak about the link between finance and relationships, yet money often acts as a major contributing factor to divorce,” says Joshua Kadish of RPG Life Transition Specialists in the Chicago area.“Understanding how to navigate through financial challenges and preparing for the future will allow you to build a strong financial foundation for your relationship.”

So what can you do to prepare for the Big Day: not just the wedding, mind you, but the day when two people join financial forces as one? Here are some tips provided to us by both Kadish and the team at SunTrust.

1. Take a hard look at your debt.

Here’s one area where, as husband and wife, you could be unequally yoked. “If one person is bringing substantial debt to the marriage, it is imperative they do not attempt to hide it,” Kadish says. “Getting married could mean one spouse will share the responsibility of the debt. Be upfront and develop a plan for paying off the balance.”

In some cases, you may even want to put off marriage until one partner has significantly reduced his or her debt.

2. Check your credit scores.

If you can believe it, there’s actually a dating website that matches people by credit score, called Creditscoredating.com. It’s becoming an increasingly important issue to couples, and here’s why: “Poor credit may indicate that one person has money management issues,” Kadish says. “To improve bad credit, discuss financial mistakes and work together towards changing bad money habits, such as making on-time payments. Failure to improve a poor credit score can delay attaining financial goals such as buying a home.

There’s no excuse: With tools like CreditKarma, checking your credit scores and reports is free and easier than ever.

3. Agree on who’s responsible for what.

The folks at SunTrust stress that “being clear about who will manage day-to-day money matters is important for a smooth transition. Will you have a joint checking account? Who will be the CFO of the family and pay the bills? Also, maintain a list of online access user IDs and PIN numbers. Be sure you keep this in a very safe place and that your spouse knows where to find it.”

That said, just because one person handles the bills doesn’t mean the other should be in the dark. Taking time for regular financial reviews (or at least ensuring both of you have account logins — and use them) ensures that you’re both on the same page.

4. Talk about annual incomes — and plan based on them.

If this subject was off limits while dating, it’s now essential to share what you make. “Annual incomes should be discussed as it will determine what luxuries the couple can or can’t afford, where they will live and how bills are paid,” Kadish says. “Don’t forget to take into consideration a partner who makes significantly more or has a commission-based income.”

5. Set clear financial goals.

This applies for both the short and long term — and now’s the time to do it. “Buying a home, retirement and even investing styles are all aspects in which you should share similar ideals,” Kadish notes. Map out a plan that can help you reach your shared financial goals.

These are just a few of the most important things to discuss before getting married. In addition, you’ll have big decisions to make like whether to combine all of your accounts. The critical thing is that you start talking about money together and you keep it up. Here, we have a worksheet that can help you get started.

Here’s hoping that whether you’re getting married, planning a wedding or recently wed, finances are a big part of the discussion while wedded bliss is still part of the equation.

About Lou Carlozo

Based in Chicago, Lou Carlozo is a personal finance contributor for Reuters Money, a columnist with DealNews.com, and a former managing editor at AOL's WalletPop.com. Contact him with story ideas for Money Under 30 at feedbacker@aol.com, or follow him via LinkedIn and Twitter (@LouCarlozo63).