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Financial Planner: Expert Money Advice

Before I Lose My Job

It seems like the headlines are announcing new layoffs every day -- more than half a million jobs were lost in December 2008 alone. Luckily, even in this shaky economic environment there are a few things you can do to prepare.

Apply for a home equity line of credit. If you're unemployed, you'll have a hard time persuading a bank that you can repay this loan, so now is a great time to secure a line of credit in case you need it. You pay interest only if you have to tap into it. The bad news: It's harder to get a HELOC than it used to be. Aim for a bank that will waive all application fees and charge an annual fee (once approved) instead. "I'd rather do that than pay $150 up front and then find out they're not going to give me the loan," says certified financial planner Constance Stone.

Get a physical. Encourage your husband to get one too, and take the kids to the pediatrician and dentist. You don't know what kind of health coverage you'll have in the future or how much it will cost, so get care while you're still on your employer's dime.

Downgrade your health coverage. When open enrollment comes around, try a less expensive health insurance plan for the upcoming year, if you can. That way, if you end up having to pay COBRA (your current health plan at full cost), you will pay less.

Adjust your withholding. Reduce federal and state withholding to get more cash in your paycheck -- then don't spend it. Sock away the extra money in a high-interest savings account. If you remain employed, you can use the money to pay your taxes. But if you or your husband gets laid off, the money will be readily accessible so you can pay your bills.

Check your credit report. Potential future employers will likely be checking your credit. Everyone should get a free report from and fix any errors -- now.

Originally published in the April 1, 2009, issue of Family Circle magazine.