5 rules for thriving in a bad economy
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Rule No. 4: Dust off your resume
When the threat of recession looms, it's smart to pay extra attention to your job.

"Corporations are in a wait-and-see mode when it comes to hiring," says John Challenger, CEO of Challenger, Gray & Christmas, the Chicago-based staffing firm. "Employers are getting more cautious about opening new offices, adding staff."

Working hard can help protect your job, but may not be enough. Instead, be strategic and figure out where you stand. Workers who cost employers money are most likely to be laid off. These include support staff in bureaucratic positions or workers in overstaffed departments.

By contrast, employees who add to a company's revenues are more likely to be viewed as valuable assets. So, try to take on work that no one else can do, or volunteer to head up long-range projects vital to your employer.

Also take note of your boss' performance. If your one ally looks like he or she may be at risk of getting bounced out, start forging additional alliances.

"Connect with higher ups so if your boss leaves, you aren't stuck," Challenger says.

Meanwhile, start networking now. It takes time to get a new job, especially if you're already several rungs up the career ladder. Entry-level employees in lower-paid positions need roughly two months to get re-employed. But higher-paid executives generally will spend five months on average to find another position.

"Keep your resume updated," urges Lee. "Keep a list of projects you've worked on as success stories."

Rule No. 5: Reduce your debt and boost savings
It's even more important to get rid of bills and amass extra cash now that the economy is on shaky ground. That's because various assets, such as homes and stocks, that helped bail out Americans out in the past few years have now plummeted in value.

For example, homeowners tapped $1.6 trillion in home equity from 2001 to 2006 to access extra cash, according to the watchdog group Demos. But that lifeline is already well-frayed.

"You need an emergency fund," Lee says. "Three months is realistic. No frills such as meals out or vacations -- just basics."

Unfortunately, "more low- and moderate-income households don't have adequate savings," says Stephen Brobeck, executive director of Consumer Federation of America.

So start saving.

"Most families can find $100 a month," Brobeck says.

This is also the time to eliminate plastic debt. Six out of 10 households don't pay off their entire credit bills from month to month, according to Demos.

Pay off your most expensive credit cards first. While credit card rates may fall, don't count on it, especially if you have a tarnished payment history. A shaky economy often gives banks a reason to increase rates.

"Banks are writing in terms that say 'We can change our rates for economic conditions or financial conditions,'" says Linda Sherry, director of national priorities at Consumer Action. "If they're not making profits in other areas, they have to make up that income."

Those who make late payments shoulder any increase in rates.

"At any given time, 5 percent of the population is delinquent," Robert Hammer, chief executive of R.K. Hammer, a bank card consulting firm. "You'll generally have to pay on time for at least a year before you can start renegotiating lower rates."

However, if a job loss pushed you to fall behind on payments and you have found new employment, don't wait the year.

"Call the company and ask for relief," Hammer says. "You may get it."