Saving During Tough Times: Five Questions to Ask Yourself

"Putting things on a credit card is not the best solution, it might even be the worst solution, but you do have to factor it into the equation, because not everyone can time their layoff," Yochim said. "First of all, keep -- don't close -- credit cards. Use them. Keep your credit active, otherwise they can close your account, or lower your limits. They only want to extend lines of credit to people who can use it."

In addition to saving, Holgate, the Seattle woman we introduced at the top of this story, built up a line of credit. She has a combined $20,000 line of credit on her two credit cards, just in case she needs to use them. And she opened a home equity line back in 2006. At the time, she had wanted to free up extra cash to remodel her bathroom. But having more than $60,000 available might also help her in a pinch -- as long as her lender keeps the line open, not a given in these days of tight credit.

If you're still working and in a good situation, Yochim advised, it may be a good idea to open a home equity line of credit. But it's important to remember that HELOCs are a last resort.

"It's a good thing for homeowners to have available, but to never use," Yochim cautioned. "You don't want to trade unsecured debt for secured debt -- don't trade the roof over your head."

But, she says, "There are true emergencies and if you need access to cash that's it and you get a tax break on interest. The same could be said for credit card offers: "Don't open them willy-nilly but if you can get it, go for it."

For the long-term, Yochim says it's not the percentage you put away that matters as much as how many months of expenses you can actually cover.

If, for example, you don't have any dependents and you can get work to tide you over in a layoff, Yochim says it's fine to have a three-month emergency fund. But, if you are the sole bread winner and you have dependents, estimate how long it would take to get another job in your industry and then, Yochim said, add three months to that.

If she does get laid off, Holgate isn't banking on another job in her industry. Instead, she's now planning her own gardening business and will apply for a business license soon.

It's possible to improve your situation in tough times: Here's what you need to know to get on that same road.

Your Savings: A Three-Tiered Cake

Saving goes far beyond the emergency savings account, which is the money you touch only when you need it.

"You have to think of it as three-tiered layer cake," said Yochim. "The top portion is the smallest one, you can have immediate access to it."

This layer covers essential expenses, fun money and your emergency savings too, which ought to be kept in a separate account.

The middle layer of the cake is looming expenses -- the kind that you see coming later, for example, savings for college, a new car, or home improvement.

The bottom layer represents long-term savings. "That's the stuff you don't want to touch," Yochim said. The largest chunk of this will be your retirement money.

If you have to dip into your savings, Yochim recommends digging into the first layer, then the second. The last resort should be the third layer.

What If You've Saved Nothing?

If you haven't saved, and a layoff is announced, Yochim suggests pressing for a better severance package, or even borrowing from your child's college fund.

"Junior can get loans but there's no such thing as unemployment scholarship," she said.

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