1. Negotiate with your company:

If a layoff is looming, try and negotiate with your employer for a better severance package.  By the way, this is something to thing about negotiating upfront when you are getting a new job.  Many companies offer their employees various services that can help them during a layoff and also to find another job.  So instead of telling your boss to stuff it, you should remain professional so as to take advantage of all the unemployment resources that your employer may be offering you.

2. Tackle your health insurance:

The first that that goes after a layoff (other than your paycheck that is) is your life insurance or health insurance.  Although the federal COBRA law protects you for 18 months after being laid off (provided there are more than 20 employees in your company) by allowing you to stay on the employer’s health insurance plan and paying your own premiums, you should find out if that applies to your situation.  If not, ensure that you get a personal health insurance policy immediately.  Short-term health insurance or individual coverage is available in many states.

3. Refinancing loans:

Refinancing loans may be very difficult once you’re actually unemployed.  Thus, as soon as you know that you’re going to be laid off, refinance your loans if that will get you a better deal.  Defaulting on your loan payments can cause your credit score to plummet, which will make things even more difficult after a layoff.

4. Unemployment compensation:

Most states have some unemployment programs where you may be entitled to unemployment compensation from the state.  You’ve been paying into them for years most likely.  These unemployment benefits can help you till such time that you find a new job.  So, find out if you are eligible for unemployment benefits and then claim them in a timely manner.

5. Job hunting:

Don’t wait till you’re back at home to look for a new job.  As soon as you know that your job is at risk, put your resume out there and start looking for new jobs.  Even if you have to work part time for few weeks or take up a job that is not as good as your previous one, do so.  Being unemployed and without a paycheck is worse that having a lesser paying job.  Consider job retraining programs and part-time education that can help you expand your options - financial assistance is often available here.

6. Cut down on expenses:

Until the time that you get another job, cut down on all expenses other than food and housing.  Cut down on your cell phone plan, disconnect the cable TV, stop eating out, don’t buy any new clothes, etc.  All this may sound tough to do, but it will only be for some time until you’re back at a new job, and it definitely makes more financial sense than dipping into your savings or your retirement account.

7. Retirement accounts:

Under no circumstances should you dip into your 401K or other retirement accounts after a layoff – there are taxes and penalties for doing so.  If the situation gets so bad that you have to, make sure you don’t withdraw directly from your retirement plan.  Rollover the savings into an IRA account and then withdraw from there.  This helps to reduce your tax liability significantly.

8. Tax breaks:

Find out if you are eligible for any tax breaks on account of your unemployment or the lower income for that year.  You may be able to save some money with certain tax breaks.

Thus, the only way to survive a layoff is to do proper financial planning, budgeting, and saving as much as possible, apart from looking for a new job, of course.