The unemployment situation in your area is probably just as dismal as in New York where the suburbs have been hit with a staggering number of real estate and financial bank layoffs.
Regardless of their local industry, the economic condition in other states isn't faring any better.
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6 million jobs nationwide were wiped out last year and looks like a repeat performance is in order in 2009.
Nothing can be as bad financially as being handed a pink slip especially when you're just a few years shy of retirement.
However, the blows are somehow softened, at least for baby boomers anyway, as it normally comes with a severance package that amounts to several months' pay.
Wisely used, it's a sufficient amount of cash to get you up and going for a while.
Used indiscriminately, that money can just pass through your hands real fast.
Here are some proven strategies that can be applied to make your severance pay last until your finances are stabilized.
Building emergency cash reserves Your severance money should be added to your emergency cash reserve to cushion the effect of hard financial times and as a ready source of money to cover your basic expenses.
Being out of work is one of those times to use this kind of fund.
Knowing it will soon run out, spend your severance wisely and make every penny of it count.
A typical severance package offers 1 to 2 weeks of salary for each year of employment, which amounts to 10 to 16 for workers 45 to 65 years old.
The ordinary baby boomer today, however, requires around 22 weeks to land a new job.
How to use your severance Don't use your severance for risky investments.
According to New York financial planner Erika Safran, the purpose of your severance isn't to earn money but rather to relieve stress and see you through until you get your next job.
Being unemployed is tough and depressing but controlling some expenses can stretch your reserve without requiring you to lead a life of self-denial.
You can, in the meantime: oFreeze IRA contributions and college savings plan.
oLearn to do the jobs you used to pay for like gardening and laundry.
oPostpone your vacation and cancel your community sports club membership.
Your family will survive without it and the kids will feel they are helping out.
Don't let your reserve dry up While finding your next job is your goal, you can use some of your time to accept freelance offers or consulting jobs to add to your reserves.
For all you know, a part-time offer may grow into a full-time career.
By all means and except as your last option, don't turn to your 401(k) for additional cash.
Once you do this, expect your income tax to swell because of the withdrawal, not to mention a 10% penalty owed for an early withdrawal.
It is a well-known fact that most people who draw from their 401(k) prematurely are never able to fill it again.
In this case, solving short-term problems can offset your long-term goals.
If you think being unemployed is a tough obstacle to hurdle, then you probably won't want to put your retirement kitty on the line, too.