Prepare a written budget. This clarifies your cash-flow situation and helps you with the following strategies. 

Dump debt. Extra debt beyond the home mortgage and perhaps car payments can weigh very heavy if you are laid off, especially high-interest credit card debt. Pay off as much debt as you can while you still have a job.

Build a cash reserve. Ideally, you already have an emergency fund in place for just this sort of possibility, preferably with at least three to six months of cash to cover bare-bones expenses. If you don't have such a fund, or it's not well funded, put cash in it now while you can afford to.

Cut expenses. To free up cash to pay off that extra debt, feed the emergency fund and perhaps even to test run a bare-bones budget in the event you are laid off, tighten your financial hatches as much as possible. Look at what expenses you could do without or reduce if you were to become unemployed, such as entertainment (do you really need the premium channel cable service?), clothing and meals out. Surprisingly, many unemployed workers try to maintain their employment lifestyle, often by piling up credit card debt, dipping into retirement savings or running through their lump-sum severance package.

Get a line of credit. Some financial advisors advocate getting a line of credit, say with your bank, while you still have a job. You won't get it once you lose your job. Don't touch the credit unless you absolutely need to, but it may come in handy while you're looking for work. A home equity line of credit would likely be less expensive than a bank line of credit and you'll get tax deductions for the interest. Just be sure you can keep up with the monthly payments, since you do put your home at risk.

Start scouting for jobs. This includes not only outside firms, but positions that may be available inside the company. As odd as it may seem, even though the company may be laying off workers in some departments, it may be hiring in others-often from the inside first. Keep looking for work once you are laid off. Amazingly, it's common for unemployed workers sitting on top of generous severance packages or lump-sum retirement payouts to postpone looking for work for months. Take your layoff as a good opportunity to upgrade your marketable skills.

Negotiate an exit package. If the pink slip arrives, you may be eligible for a substantial exit package. You may have options, such as taking a lump sum or taking a salary continuation package that might include company funding of a health care plan or your retirement account for a while beyond severance. You also may be in a position to negotiate a stronger exit package than initially offered. Review any exit package options with your financial planner practitioner.

Continue health insurance. Don't go without! If the company's exit package doesn't continue your group health insurance, consider continuing the coverage under COBRA. This is a federal law that requires many employers to allow unemployed workers to continue group coverage, usually for up to 18 months, as long as the worker pays the premiums.

Don't count on unemployment insurance. It won't begin to make up for your lost wages, though every little bit helps. Keep in mind when calculating your post-layoff  income that unemployment insurance income is taxable and it's short term.

Don't touch your retirement funds. Try to avoid borrowing or withdrawing funds from your retirement accounts, or spending lump-sum retirement payouts from your former employer. The layoff probably will be temporary, but retirement isn't. Pulling funds out early could cost a lot in taxes, penalties and lost growth opportunities.

With sound financial preparation, you increase your odds of weathering a layoff, and even put yourself in a position where you won't feel pressured to grab an undesirable job.