Q: WHAT CAN I DO FINANCIALLY TO PREPARE FOR A LAYOFF?

A:
In these uncertain economic times, it pays to be fully prepared for anything, even a dreaded downsizing. If the writing is on the wall and it’s only a matter of weeks or months before you’re laid off, here are some steps to take to be financially prepared.

If you own a home, establish a home equity line of credit. “If you wait until after you get laid off, you may not be able to establish a home equity line of credit. The upside is that the interest on this loan is tax-deductible,” says David Schwartz, president of First Capital Equities, an investment advisory firm in Great Neck, New York.

Establishing a home equity line of credit is as simple as going to the bank and filling out a form, provided that you have equity in your home. You may not need to draw on that credit line, but it’s better to be safe than sorry.

Rebalance your portfolio. Make sure that enough of your investments are generating income returns versus just capital appreciation. “Convert some of your equities to bonds, and within the bonds invest in short- or intermediate-term instruments because they are highly liquid,” says Schwartz.

Even if you’re lucky enough to get a severance package, taking these preliminary steps is a smart move in case you don’t find a job right away and, as a result, spend your severance.