Despite recent assurances from his boss, my son-in-law, Kyle, was laid off from his engineering job three weeks before Christmas.

"We felt betrayed and hopeless, especially in this tough economy with two young sons," my daughter, Veronica, said.

Kyle and the boys, 8 and 5 years old, could be covered under Veronica's employer's health insurance plan. If not, Kyle would have had to search for an individual plan (www.healthinsurance.com is a good online resource) or pay high premiums to temporarily stay in his former employer's plan under COBRA, a federal law.

Kyle filed immediately for unemployment benefits. (For information on these programs, which vary by state, check www.workforcesecurity.doleta.gov/unemploy/uifactsheet.asp). He and Veronica cut out all nonessential expenses, including landline phone, pest control service, cable television and eating out, and suspended deposits into Veronica's retirement plan.

"The first thing to do is analyze your expenses," recommends Tara Scottino, a certified financial planner in Dallas. Even recurring expenses such as auto insurance are not "fixed" if you find a better rate.

"Many times we get used to paying a bill, and we don't have the time to mess with it," Scottino said. "But when you're unemployed, it's important to see if the bill is in line with the going rate."

Also, avoid credit cards. "It's particularly important to protect your credit if you are laid off," Scottino said. Maxing out your cards -- or, worse, missing a payment -- will damage your credit score and saddle you with debt.

On his job search, Kyle took to heart the advice to "network, network, network."

"We told everyone we knew and were surprised how many people had a brother, cousin or friend who worked in engineering," said Kyle, who looked for jobs daily, including holidays. Continued...