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I'm getting laid off. How am I going to survive financially until I find another job?

There are a number of ways you can smooth the transition to your next job. To begin, you'll want to plan on your job search taking six months and budget accordingly. Your budget should reflect the money you'll need to use while looking for your new position.

Because you're being laid off, you may be eligible for unemployment benefits from your state as well as severance pay from your employer. If you have an emergency reserve set up, you can count on that, as well. Otherwise, you might have to dip into your savings account. You can consider taking a part-time job to supplement your income. If your search takes longer than expected, you may have to consider more radical ways to come up with income, such as borrowing against a life insurance policy that has cash value, borrowing from relatives, or withdrawing money from a tax-deferred retirement account. Each way has its drawbacks, but you'll want to be particularly careful with retirement accounts because you may incur fees and penalties.

Review your budget to identify where you can lower or perhaps cut out expenses for entertainment, dining out, and vacation or holiday travel, for example. You can also reduce expenses in small ways that add up: cancel magazine subscriptions, eliminate extra phone services, and stop your cable service. Negotiate with your creditors to lower interest rates or receive temporary deferments, and review your car insurance policies to increase your deductibles or drop certain coverages.

If you have time to prepare for unemployment, you can take some steps immediately to help yourself. A home equity line of credit can give you funds to draw on (though you'll have to make monthly payments) and may allow you to pay off credit card loans with higher interest rates. You can reduce or stop contributions to retirement or education funds and put the extra money into your emergency funds. Finally, you can also consider increasing your withholding allowances to reduce the amount taken from your paycheck.