smart spending

15 tips to survive a job loss

7. Prioritize your bills. It's never wise to let bills go unpaid, but if you're in a money crunch, make sure you know which ones to pay first. "If your creditor is happy but your electricity's been cut off, you've paid backwards," Cunningham says. Creditors are persistent, but your five major priorities should be your rent or mortgage, utility bills, food, insurance and medicine.

8. Come up with a weekly cash-flow plan. It's not difficult to come up with a monthly budget -- just tally up your fixed costs like mortgage and utility bills, and make some estimates about your discretionary spending. Unfortunately, it's easy to forget over the course of the month how you actually spend your money. Gichon says you'll benefit by dividing your budget into weekly increments. "If you can control your budget, you can do so much more with your money," she says. "It's much easier to do on a weekly basis."

9. Consider alternative health care options. COBRA is an easy -- but expensive -- option to retain your health care coverage after your last day of work. If you're relatively healthy and don't have chronic conditions, a bare-bones major medical plan may help you save money while still protecting you from catastrophic emergencies. The Web sites Insureme.com (a Bankrate company), Ehealthinsurance.com and Insurance.com offer good options.

10. Call your creditors. It may seem counterintuitive to let your creditors know you've lost your job, but Haubrich says you're more likely to be able to cut a deal that way. "It helps to be proactive," he says. "The creditor may be willing to discuss some type of minimum payment. They're likely to be much more reasonable with you if you tell them upfront, rather than waiting for them to contact you after you've missed a payment."

11. Resist the urge to overspend during your job search. It may be tempting to think that you need to have a $150 haircut and a $750 suit to make a good impression during a job interview, but Gichon recommends making your purchases sparingly. "It's fine to give yourself permission to spend, but maybe it only needs to be a new shirt or a new necklace." Instead of networking at business lunches, consider meeting in hotel lobbies or coffee shops, which can be just as effective and much less expensive.

12. Network wisely. Get in touch with people who may be able to offer help -- but try not to burden them, Matuson says. "Ask for 10 minutes of their time -- and stick to the 10 minutes," she says. "Have a resume ready."

13. Don't pay off your debt. Haubrich says clients often are eager to pay off their debts and close their accounts because of the psychological weight they carry when you're not bringing in any income. He believes it's the wrong strategy. "Your ability to get lines of credit is compromised when you don't have a job," he says. "If you end up needing money, you won't be able to get a new loan."

14. Stay away from your 401(k). It's almost never wise to raid your retirement accounts -- not only will you pay a hefty tax and 10 percent penalty, you'll also miss out on years of growth and compounding. And once you take that money out, you can't put it back, unless you take it out as a loan, but then you will just be creating another monthly bill to pay.

15. Avoid quick fixes. If your back is against the wall and you have no idea how you'll make your next rent or mortgage payment, you'll probably need to get a job right away. However, if possible, don't just take whatever's immediately available, Haubrich says. "If you become desperate and grab the first job that comes along, you might find that today's solution becomes tomorrow's nightmare," he says. He says that some people find that losing their job can be just the push that some people need to find a new career path that brings them greater satisfaction.

Erin Peterson is a freelance writer in Minneapolis.

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