With a lingering recession, anemic job market, and rising property taxes and fuel bills, experts predict that many more people will default on their mortgage payments and face bank foreclosure action. Small business owners and contract freelancers are especially vulnerable to economic slump.

The Self-Employed 401k is a qualified retirement plan that can be set up by anyone who has a part-time or full-time business. This retirement plan is similar to 401k plans of large companies. The difference is that Self-Employed 401k is designed for an individual and as such is less complicated and less costly to maintain. Any person with a business with no employees can set up a Self-Employed 401k plan.

The cost and features of Self-Employed 401k plans will vary depending on plan vendor. A typical plan will cost less than $200 a year to maintain and allow loans with terms of 5 years or more at an interest rate close to prime rate. The good part is that all of your loan payments including interest go back to your 401k account. Take caution, however, because not paying your 401k loan on time will trigger IRS tax consequences as if your loan was a taxable distribution.

For more information or to obtain a Self-Employed 401k visit InvestSafe.com.

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