In April, the national unemployment rate was at 8.1 percent and 12.5 million Americans were officially out of work, according to the Bureau of Labor Statistics. The survey showed that 2.4 million people, those deemed “marginally attached to the labor force,” were not counted among the unemployed ranks due to not having looked for work in the preceding four weeks. Nearly 1 million of these people had given up their work search. Also not counted among the officially unemployed were 7.9 million “involuntary part-time workers” who could not find full-time work. Significantly, 5.1 million Americans had been unemployed longer than 27 weeks.

These statistics, while reflecting a slight improvement in the overall unemployment rate, are troubling. Being “downsized” can lead to not only emotional distress but financial strain as well. If you are laid off, however, there are financial planning steps you can take to minimize the impact while you are looking for work.

Be Proactive

If signs are pointing toward an imminent layoff at your company, be proactive and discuss it with your manager. At worst, your fears might be confirmed and you can start looking for a new job right away. At best, you might be able to swing a better severance deal or position yourself for another job within the company.  Be sure to ask your employer whether they provide assistance for dealing with job loss.

Another proactive approach is to stash away enough cash to live on for three months, six months or possibly even longer, in case you lose your primary income.

Finally, make sure you pay off your credit cards each month while you’re employed. Paying extra on the principal amounts of loans and mortgages will cut your debt and interest, freeing up more cash for when you need it most.

Examine Your Expenditures

If you’re laid off, or are expecting to be, the first step is to scrutinize your budget for areas where you can cut back. Decide which expenses are optional and which are mandatory. Eating out, cable or satellite radio, gym memberships, movies, concerts, other entertainment, lawn services, storage unit rentals – anything not essential – can be eliminated or drastically cut. Remember that it’s only temporary, until you find another job, but the sooner you get your expenses under control the better.

File for Unemployment Benefits

Don’t put off filing for your state unemployment benefits. Agencies are busy and typically understaffed, especially during periods of high unemployment, and it can take two weeks or longer to start receiving benefits after you file.

Hands off the Retirement Savings

Now is not the time to take money from your retirement account. Depending on your age, you will likely owe a substantial early withdrawal penalty in addition to income taxes. Promptly rolling over your old 401k into an individual retirement account (IRA) will keep your savings intact and avoid penalties. Talk to an investment advisor about the best way to invest your funds after a rollover. If you have no choice but to draw on your retirement savings, consult with an expert before doing so.

Hanging on to Your Healthcare

If your former employer offered health insurance, you can continue your old coverage for 18 months through the COBRA program. Although the coverage is the same, the cost to you will be much higher than it was as an employee. Unless you have a pre-existing condition that would not be covered by a new policy (if you do, look into your state’s ‘high-risk’ pools), shop around for more affordable coverage. Look for any high-deductible options with reasonable office visit and prescription co-pays to save on premium costs. If your spouse is employed, check into being added to his or her policy.

Consult with your former employer about the portability of any other types of insurance, including life, disability or long-term care, and then examine your private options with a professional.

Insurance is important, but how much you can afford to keep while you’re unemployed depends on how prepared you were for a layoff and what you can pay for on your more limited budget.

Make Job Hunting Your Job

Of course, one of the most important aspects of financial planning is to ensure that you have an income. If you know layoffs are coming, start looking for a new job before your current job is gone. After a layoff, don’t dwell on being unemployed; make looking for a job your new job. Stay optimistic and work hard to find one. If your resume is out of date, make it current; focus on your accomplishments instead of only your daily tasks. Eliminate typos, spelling mistakes and grammatical errors. Getting a job is key to your future financial well-being, so make sure your resume and cover letters are accurate, well written, targeted to the right audience and mistake-free. Get professional help if needed. If you can’t afford such help, consider bartering.

Finally, if you’re one of the millions who cannot find another good job in your previous field, consider changing careers or even starting a small business.

Losing your job can be traumatic, but a thoughtful, businesslike approach to financial planning after a layoff will reduce emotional and financial stress and increase your chances of quickly transitioning to a new job or career. Talk to a financial or tax professional before making any major financial planning decisions.