Strategies for surviving layoffs

Maybe you’ve recently gotten the pink slip at work —- or you fear you might be next. Since the economy isn’t on the rebound, many of the newly unemployed are feeling stranded, with no prospects for a new paycheck. Financially speaking, cutting back on lattes isn’t going to do the trick.

While times are tough, you can get through them if you make the right moves. Here are strategies so you can keep your head above water.

Old thinking: Cut back on eating out.

New thinking: Cut back on everything.

If it doesn’t feed you, keep you insured or keep a roof over your head, you can live without it, at least for now.

Shop around for home, auto and life insurance to find a better deal. Drop your cable package and instead watch TV on free sites such as hulu.com. Cancel your home phone and use your cell instead.

Just be sure to keep the right tools for job searching, such as high-speed Internet.

If you’re really struggling, it’s time to rethink bigger-ticket items. Maybe you don’t need a second car —- or perhaps it’s time to sell the house. It’s a drastic step, but if you’re facing foreclosure, it’s your best bet.

Old thinking: Tapping retirement funds should be a last resort.

New thinking: If you’re forced to do so, tap the Roth IRA first. Only 39 percent of Americans have enough cash stashed to cover even three months, according to bankrate.com. When you’re short on cash, make sure you’ve looked everywhere before you touch your retirement funds.

If you have a Roth IRA, you can take out the amount you contributed penalty- and tax-free, since it was post-tax money to begin with. If you have a traditional IRA, you’ll most likely owe taxes on any money you withdraw. And if you’re younger than 59 1/2, you’ll pay a 10 percent early distribution fee. Be sure to withdraw enough to cover the taxes you’ll owe in April, the 10 percent penalty and your actual cash needs.

You can avoid the early distribution penalty if you pull out funds to pay health insurance premiums after receiving unemployment benefits for at least 12 weeks, or for higher-education expenses.

If you have a 401(k), roll it into a traditional IRA.

Translation: You’ll be taking a big hit. Be sure you really need the money.

Old thinking: Put your credit cards away—- period.

New thinking: Get a 0 percent-interest card and use it responsibly.

If you truly need credit to pay for essentials, look for low-interest cards on bankrate.com. Many offer six to 12 months at 0 percent interest.

When applying, include your spouse’s income, any severance, child support, the salary you received before the layoff and expected unemployment payments. (Or have your employed spouse apply, if possible.)

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Where to write: Good Housekeeping Reports, care of King Features Syndicate, 300 W. 57th St., New York, NY 10019.