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Till death do us part? It depends on your debt burden

Jessica Dickler

With money at the root of a lot of relationship stress, it's no surprise that a partner with credit issues can cause a significant strain and even a split.

More than one-third of borrowers said college loans and other money woes contributed to their divorce, according to a recent report from Student Loan Hero, a website for managing education debt.

However, these days, significant debt is harder to avoid, particularly among those just starting out. A typical millennial living in the city carries a hefty burden — about $23,064, according to LendingTree's latest study — mostly due to record-breaking student loan balances, sky-high rents and car loans.

If you are looking for love, that kind of financial strain does not bode well. More than three out of four Americans in a committed relationship, or 78 percent, prefer a partner who is good with money over one who is physically attractive, according to a survey by Wakefield Research for Citigroup.

Even among the rich and famous, debt takes a toll. "It's all relative," said Stacy Phillips, a partner and certified family-law specialist at the firm Blank Rome in Los Angeles. Phillips has represented a variety of high-net-worth clients, including celebrities like Britney Spears.

"There's a tendency, especially in America, to live beyond your means," Phillips said.

But one partner's bad credit could impact other aspects of your life as a couple when you apply for credit jointly. That includes what mortgage rate you qualify for together and whether you qualify at all.

Across the board, the better your financial footing and the higher your credit score when a committed relationship starts, the less likely you are to break up after the first few years, according to research by the Federal Reserve Board.

Those with the highest credit scores were most likely to form long-lasting committed relationships. And the greater the mismatch between a couple's credit scores, the more likely they are to separate within the first five years, the study showed.

"People who look at finances differently can be a good balance but more often than not it can create a lot of problems," Phillips said.

"If your way of looking at life is so different – one person wants to stay in the Four Seasons and one person wants to go camping – it's going to be a problem," she added.

In general, it most likely becomes an issue when couples merge their accounts and don't talk about it, according to Tiffany Welka, an accredited wealth management advisor and vice president of VFG Associates in Livonia, Michigan.

Welka advises clients to come up with a budget and financial goals for one, five and 10 years down the road. Of course, those goals can change, she added, particularly as your financial standing changes, as with the birth of a child or the loss of a job.

That's why it's important to touch base routinely, Welka said. "Revisit what your budget once a month or once a quarter."

But it doesn't have to be a chore, she said. "Make it a movie date and spend half an hour or so checking in on each other and staying on track."

More from Personal Finance:
1 in 8 couples blame student loan debt for their divorce
Five money mistakes that can destroy a marriage
What celebrities can teach us about marriage (and divorce)