As with most people your home and retirement savings probably represent bulk of your available assets. However, withdrawing money from your retirement accounts, even if it’s to protect against a foreclosure, will cause you to lose a big part of your retirement money to taxes. A better strategy is to take money out of your retirement funds by way of a 401k loan. A loan from a 401(k) doesn’t trigger any distribution taxes and avoids 10 percent early withdrawal penalty, as long as you repay loan.

When you have a job you generally can get a loan from your employer’s 401k plan. But once you leave or lose your job, as a rule, you can no longer keep your 401k loan or borrow from plan.

But when it comes to wealth, it's as important that you do a regular checkup for your financial health. You need to know where you are financially before you decide what you want to achieve financially.

What do you do to ascertain your level of financial fitness?

You can use financial statements to determine your financial fitness. They are income statements and balance sheets.

It sounded boring and alien to me when I first prepared my income statement and balance sheet. The process is tedious as you need to dig out things and get them organized in a proper format.

But I can tell you once you've done this checkup, you'll have a clear picture where you stand financially and you can take necessary measures to achieve financial freedom.

Besides that you'll be more in control of your money and know how to spend your money wisely.

Let's get started to determine your financial fitness.

---------------- Income Statement ----------------

First, you can prepare an income statement. An income statement is also called profit and loss statement. An income statement consists of two sections: monthly income and expenses.

Your income would probably comprise salary, rent from real estate, dividends from stocks and bonds, interests from savings accounts, and royalties.