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Here's a sobering thought: Because of economic forces beyond your control, you could be hit with an unexpected layoff at almost any moment. It's always a good idea to plan ahead for potential financial emergencies before they strike.

1 Establish an emergency fund. Set aside enough money to cover your basic living expenses for three to six months. This should give you the ability to pay your rent or mortgage, buy food and repay debts. Sock this money away in an online-only, high-yield money market account or a short-term certificate of deposit.

2 Live within your means. Don't spend excessively on items and services you don't need.

3 Use credit cards with great caution. A credit card can keep you in denial about your true financial situation. Accumulating debt will only add to your stress.

4 Talk about money with your partner. Even when things are going well, it's common for one partner to be completely unaware that the other partner has different financial priorities and goals. A layoff can put the spotlight on such differences and lead to terrible fights. Talk honestly and set goals together about how to cope in the coming weeks and months.

5 Tackle high-interest debt. Make sure you're not letting debt hang around for months on a high-interest credit card. Transfer that debt to cards with lower interest rates, or pay it off with money from a small closed-end loan from your bank or credit union. Then over the next three months or so, you can concentrate on paying back that lower-interest loan.

6 Network, network, network. Make a point of getting to know as many people as you can in your line of work. By having plenty of friends and contacts in your industry, you'll stand a better chance of finding work quickly if you lose your job.

7 Line up a line of credit while you're employed. Open a home-equity line of credit and keep it open. Some lenders charge an annual maintenance fee in the $75 to $100 range for keeping a line of credit open, but that can be worth it for the peace-of-mind factor.

8 Pursue disability coverage before you lose your job. Personal disability coverage is an important thing to have and it's important to secure coverage based on your income. Apply for such coverage while your income is at its highest.

9 Seek higher education while you can. Do you work for a large company that offers a "Corporate U," or for an employer that helps cover education costs? Tap into that resource so you can improve your skills and bolster your resume. Hundreds of corporate university classes have been accredited, meaning you could get credit for them if you ever enroll in a degree program.

10 Investigate your health insurance policy. Be clear on what your health plan covers, and figure out how much it would cost to extend your employer's group insurance coverage through the federal program COBRA. Be aware that you would have to pay the employer and employee shares of the premiums (ouch!) but at least you'd get to keep the coverage.

Laura T. Coffey (

Sources: Financial Planning Association ( and (