Warding off the leading cause of divorce

TAMPA - Courtney and Jason Aughey are madly in love. Jason said the two of them were at the now-closed Whiskey Park South in Tampa when he saw her across a crowded room.

"She literally bumped into me. I knew I was going to marry her," Jason said.

And, like all newlyweds, the couple is committed to a life long partnership. Courtney is adamant.

"Absolutely, I am only doing this once," she said.

But the odds are dismal. Research shows nearly half of all married couples end up splitting. The statistic was not going to discourage the Augheys.

"With the way the world is, with the divorce rate and things like that, we don't want to be a part of that," Courtney said.

They found that finances are the leading cause of divorce. So even before they walked down the aisle, Courtney and Jason walked through their budget.

Jason explained: "It goes to the strength of your relationship in that we don't keep secrets from each other. So it was a matter of throwing all our cards on the table.  There are definitely some hurdles you are going to overcome."

Courtney agreed that it all boils down to trust. "Trust in that and you are being honest about your financial background. I mean if you come to the table and you have $50,000 in debt, that can change everything."

Financial planner Jonathan Wax could not agree more. He has seen many break-ups over money.

"It is the lack of budgeting that leads to a reckoning point that might be too late to be able to reverse course and that comes down to a point where people start arguing on who was the lead cause of it, and it ends up ballooning from there," he said.

Wax recommends taking proactive steps before commingling funds. It begins with four critical questions.

• How much is there? Take a look at all sources of income from checking, savings, and retirement accounts.
• Where does it come from?
• Where is it kept and invested?
• Where is it going?

Wax stressed there should be two common goals.  "We recommend that you budget so you are saving money each month.  Put money in your retirement plans to build up an emergency reserve."

Wax also said many couples are opting for three accounts: a his, a hers, and a joint account.

The majority of money is put in the one that is shared for expenses. It's what Courtney and Jason decided to do. And this couple is confident their communication about money matters is priceless.

"It’s a check and balances system to know that we are going to work together now.  It is the two of us as one, and so for the long term, we really feel like we have worked it out.  We know who is responsible for what, and as long as we are keeping on the same page of what those finances are, we should be in good shape," Jason said.

So will their bank account.

Here are more tips from Jonathan Wax, President & Chief Executive Officer Waller & Wax Advisors Inc.

Investing style:

Some advisors claim that younger investors can handle more risk as they have more time to make up for losses. We would steer younger, more inexperienced investors to focus on return OF their money, not return ON their money.

They need to be consistent in building their investment portfolio through both paycheck deferrals into retirement plans and automatic investing into a traditional investment account.

They need to start early in life and invest often. As the miracle of compound interest shows, the growth of your portfolio takes off after years of investing. Eventually, you can see the portfolio passively making more money for you that you are putting in.

The ultimate goal is to see the portfolio generating growth that exceeds your current income without taking on substantial risk. At that point, far down the road, you are realizing your retirement goal potential.

Young couples should be disciplined with their finances and think about the future just as much as they think about the present.