You've been laid off and worry about coping financially. Here's how careful planning can help you through the crunch.

Budget and Regroup

"Review, prepare, and live by your budget," commented chartered accountant Eugene Migus, senior vicepresident of financial recovery services at BDO Dunwoody Limited, in Mississauga. "Assess your current financial situation by preparing a monthly budget for your household income and expenses. Then determine where and what you can cut."

Because you never know how long unemployment will last, regroup by considering these strategies: • Determine the minimum you need to cover basic expenses, including rent or mortgage payments, utilities, food and transportation, and prioritize your expenses. • Temporarily cancel automatic withdrawals for bill payments, and maintain control over who you pay, how much you pay, and when. • Enter a cash conservation mode. • Investigate your health and dental coverage; can you be covered under a spousal plan? • Apply for unemployment insurance; now is the time to recoup your contributions.

Create, Conserve, Convert

"Go back to the three Cs of basic financial planning; create wealth, conserve resources, and convert assets," advised chartered accountant Robin G. Taub, founder of Robin Taub Financial Coaching in Toronto.

To create wealth, focus on finding another job. Work your network. Determine your strengths and reframe the situation positively. Consider starting your own business.

To cushion the immediate financial blow, focus on conserving your resources by reducing discretionary spending, including restaurants, shopping, vacations and entertainment. Refinancing your existing mortgage or downsizing will also reduce your monthly overhead. Use any backup savings to help you through this emergency.

Consider converting certain assets into cash, including a second home or "toys" like boats or motorcycles, which can sustain you and be invested to produce income.

Dig Deep

Taub, who said sound financial coaching can help you plan effectively for major life events like unemployment, advises not to do anything hastily.

"Before you downsize or refinance your home, dig deep and ask how this crisis affects your life. It's often psychologically difficult to adjust your standard of living; and each person reacts differently to this challenge. What is important to you? What is your attitude to money? What can you live without? For any action to be sustainable, it must be in line with your values."

Still Short?

"Remember you have options," Migus added.

"Be open with your creditors. Tell them you've been laid off and are seeking new employment. You can often save your home or car by working with your lenders to adjust your payments. Creditors including creditcard companies, mortgage companies and student loan programs will usually offer some temporary relief.

"Avoid incurring new debt, such as cash advances on a credit card, a short-term loan, using your line of credit or tapping into your RRSP (thus creating a tax liability)," Migus cautioned.

If you are considering any of these actions, consult your chartered accountant or trustee in bankruptcy chartered insolvency and restructuring professional. Being proactive often brings options you didn't realize you had.