What to do if you get laid off.

In today’s economy, employees lose their jobs for all kinds of business reasons that have nothing to do with their performance, skills or personal ability. So don’t let it eat at your self-esteem. It hurts, but it’s not personal. When you’re young, you really care what people think about you, when you get to middle age, you don’t care anymore what people think about you, and when you’re older like me, you find out people weren’t really thinking about you at all. Here are some actions to consider if and when the ax falls:

• Cut out any unnecessary expenses and prioritize your bills.
Mortgage and utilities should be paid first. If you fall behind on your mortgage, you could face late fees or even the loss of your home. Review your insurance policies for sources of short-term cash. If you have a permanent life insurance policy, you may be able to borrow against it. If money is tight, you may also need to make just the minimum monthly payments on your credit cards. If that's a problem, ask your creditors to reduce your minimum payments or waive interest until you have a job. A credit counselor may also be able to help. Contact the National Foundation for Credit Counseling at www.nfcc.org or call 1-800-388-2227 to speak to a counselor in your area.

• Liquidate your stock portfolio before turning to your credit cards or to your 401(k).
Tapping into your retirement account should always be a last resort as there are significant tax penalties when you withdraw money prematurely. Consider rolling your 401(k) money into a personal IRA so you can withdraw some of it now and defer the tax consequences until next year. Ask the financial institution that manages your plan what exit fees, if any, you have to pay. Once you leave your job, you can't borrow against your own 401(k) plan. But if your spouse is still working and has a 401(k), you may be able to borrow from that plan.

• File for unemployment benefits as soon as you can.
Since you're unemployed through no fault of your own, you’ll probably qualify for unemployment benefits if you meet state requirements for wages earned and time worked over a certain period. If your company plans to continue paying your salary, you probably won't qualify for benefits until the paychecks stop. So ask for the same amount in a lump-sum severance package instead so you can start receiving unemployment right away. You can apply for unemployment in California by calling 1-800-300-5616, or you can do it on-line at www.edd.ca.gov/eapply4ui.

• Remember to change your tax withholding.
If your spouse is working, adjust withholding on that paycheck to reduce the amount of tax withheld. With only one wage earner in the family, you'll probably fall into a lower tax bracket with a lower deduction.

• Assess your health-insurance options.
If you can't join your spouse's employer-sponsored health plan, consider extending your previous coverage through COBRA or buying an individual policy. COBRA is a federal law that lets you continue your health care coverage after you leave your job. However, you’re responsible for paying the cost of the coverage, and there’s a maximum continuation period of 18-months. You have 60-days to decide if you want to elect COBRA, and during that time, you can elect retroactively. So if you break your leg on the 59th day, you can elect COBRA and you’ll be covered. If you break your leg on the 61st day, that’s unfortunate because you'll have to pay for it yourself. Generally, people don't elect COBRA in the initial 60-days unless they need it since they hope to find a new job in that time that will provide new insurance coverage.

• Waiting the 60-days may not be appropriate if:
- you have a serious pre-existing medical condition, you may want to elect COBRA right away. A new carrier can exclude you from coverage for a pre-existing condition for six-months to a year if you can't show that you've had continuous coverage.
- you plan to go overseas. It can be difficult to get COBRA activated retroactively if you're trying to make arrangements from another country.

• If your firm offers the use of an outplacement service, take it.
Although it probably won't find you a job, it will help you get organized, refresh your resume and practice your interviewing techniques. You'll also meet other people in the same boat as yourself who can provide you with a strong support network.

The job-hunting bible, What Color is Your Parachute, says there are three primary themes to job-hunters’ success stories:

1. If you want a job, you’re going to have to work really hard to get it.

2. Success will come in direct proportion to your job-hunting efforts.

3. Successful job-hunting requires a willingness to change tactics if what you’re currently doing isn’t working.

So, don’t panic. Gather your wits about you and move forward. And remember that striving and struggling come before success even in the dictionary.