List down your income and expenses into each section accordingly. Then calculate your total income and expenses.

Once you've done that, it's time to calculate your net income. Net income is difference between your gross income and expenses:

net income = gross income - expenses

If you have a negative net income, it tells you that you spend more money than you make. You'll have to have plans to reduce your spending or increase your income.

------------- Balance Sheet -------------

Next step is to prepare a Balance Sheet. Like income statements, balance sheets also have two sections: assets and liabilities.

Assets are your cash, real estate, car, bank accounts, stocks and bonds, mutual funds, retirement accounts, and businesses.

Liabilities include mortgages, credit card loans, car loans, personal loans, education loans, and taxes.

Prepare your own balance sheet by listing down your assets and liabilities. Calculate your total assets and total liabilities.

The following step is to calculate your net worth. Net worth is difference between total assets and total liabilities:

net worth = assets - liabilities

Net worth is usually used to determine whether a person is wealthy.

You deserve a pat on your shoulder if you've come so far with me. By doing this simple exercise, you are one step ahead of many people.

You'd have known level of your financial fitness by now.

So, are you financially fit?

To help you with this exercise, you can use our free money worksheet at http://www.financiallyrich.com/wealth-calculator.asp

1)    Obtain a credit report from anyone of credit bureaus to determine if there are damaging entries that might cause your credit application to be denied. By checking your credit from all of credit bureaus, you can determine which one is your best option.

2)    Call several banks and lenders and ask receptionist, etc., which credit bureau they use in their application approval process. If individual tells you they don't know, ask them to find out.

3)    Select a bank or lender that subscribes to a credit reporting agency other than one typically used in area. This will ensure that you have most favorable information readily available to check.

4)    Obtain a credit report from credit reporting agency that your selected lender uses. A simple process that can be easily done on Internet.

5)    Repeat step number 4 until you find a report that is most favorable to you and shows least negative entries.

6)    The only thing left for you to do is apply with that bank, lender, or other creditor that subscribes to credit bureau that has credit report most favorable to you.

Your credit file could list multiple damaging information in one credit report, but never show up in another! By obtaining your credit reports in advance, you will definitely know which lender to approach for credit. All you have to do is ask! By establishing a strong credit background, you'll be able to enjoy life, without any worries of being declined, getting things you want! Just think...no longer will you'll be embarrased or turned down because of bad credit. The choice is all up to you to do it!