As I write this, the official unemployment rate is above 7 percent, and I expect it to keep climbing in 2009. If that gives you a shiver of job insecurity, good! Never has "Hope for the best, prepare for the worst" been sounder advice for your financial security. Keeping your job is probably a function of many factors beyond your control; how well you manage if you are laid off depends on how well you have planned for one of life's most unsettling what-ifs.

Bolster your savings fund. Make it a priority to have at least eight months of living costs set aside in a federally insured bank or credit union account. Never invest emergency savings in the stock market. And don't rely on a HELOC. When you go to tap the credit line, the bank may say no.

Get rid of debt now. If you still have income coming in, or a severance payout, and you have an eight-month emergency fund, make it a priority to pay off credit card debt ASAP. If you have an outstanding 401(k) loan, pay it off now. If you are under 55 years old and get laid off, the loan usually must be repaid within a month or two, or you will be stuck paying income tax on the loan amount as well as a 10 percent penalty.

Cut back your spending now. Don't wait until you are laid off to save. Repeat after me: Needs, yes. Wants, no. Got it? Use the money to get out of credit card debt and boost your savings.

Maximize unemployment benefits. If you received a good severance package, don't use it as an excuse to take a long vacation. Give yourself a week or two to decompress and then get serious about job hunting. You want to find a job before your severance runs out, and that could take months. Also, make sure you apply for unemployment benefits; you can find out how to file in your state at . And take advantage of online filing if it's available in your state. Given the rising jobless ranks, the offices and telephone lines for unemployment offices are jammed.

Suze Orman's most recent book is her 2009 Action Plan: Keeping Your Money Safe & Sound (Spiegel & Grau).

Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.


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