The Best Way to Handle Debt When Newlywed

According to North Carolina State University, approximately 20 percent of divorces happen within the first five years of marriage. Money is a top reason couples fight. Handling debt in the early years is very important, according to Smart Money. Developing positive habits such as creating a budget and managing debt together (instead of separating money) can help.

Don't Split Up Debt

According to Smart Money, newlyweds may be tempted to split their debts. This is especially true if one partner has more debt than the other. Smart Money cautions against dividing debt. Unfortunately, your partner's debt affects your credit score, which means you should forge a partnership to pay it off.

Try creating a debt payoff plan. This allows couples to agree on a specific amount of money to pay towards debt each month. Make sure to also discuss cutting back on spending. Otherwise, your monthly payments won't be paying down the debt balance.

Develop a Family Budget

Merging money is tough. Creating a family budget right from the start can help, according to Smart Money. This will rein in spending and make each partner accountable for spending. Take a look at the budget every month.

The document should be flexible enough to accommodate new expenditures and scale back when times get tough.

Start an Emergency Savings Account

Newlyweds should create a "rainy day" fund right away, according to Smart Money. This way, if unexpected expenses come up (like car repairs), the couple can tap into savings instead of using a credit card.

Try setting up an automatic transfer program with your bank. Each month, the bank will transfer the elected amount directly to a savings account. This will help the couple save, even when financial times get tough.

Get Help For Serious Debt

If debt seems unmanageable, the Federal Trade Commission (FTC) recommends contacting a credit counselor for help. These organizations are non-profit, and can be found at universities, military bases and credit unions. Find reputable companies by contacting the FTC.

Another option for debt help are Debt Management Programs (DMPs). These programs help families negotiate debts with creditors and set up monthly payment plans. The couple will deposit an agreed upon amount each month to the DMP company, and they pay the creditor.