If you have lost your job or are facing a lay-off, you need a plan for coping financially. This is especially true if you have not been able to build an emergency fund or you have been living too high and have never considered there might be a disruption in your income.

Let us start with some tips for folks who are still employed but who know they will not have a job for long. Here is how to prepare for that pink slip:

— If you have not built up an adequate emergency fund, stop your retirement contributions. When faced with monthly bills and no pay cheques, you need to stockpile as much cash as possible. If you were to contribute that extra cash to your 401(k) and later you needed it during a long unemployment stint, you could be looking at a 10 percent penalty in addition to income tax payments.

— Lower the withholding on your remaining pay cheques. Your taxable gross income is likely to be lower for the year even if you find a new job in a few months.

— Make the minimum payment on your credit card. Again, you need to begin saving as much cash as possible for essentials - the rent or mortgage, food and utilities. Once you are employed again and out of financial danger, return to aggressively paying down that debt.

— Review your budget (I hope you have one) and cut every expense that is not a necessity. This suggestion may appear simplistic, but many folks facing a job loss do not move fast enough to cut expenses. People waste money on high cell phone bills or allow their teens to continue texting. Only after the paychecks stop do they panic and begin to cut.

Cell phone users who send and receive e-mail and text-message alerts, take and send photos and videos or download music report an average monthly service bill of $77, according to a survey by market researcher JD Power and Associates.

The time to start cutting back is the day you know or are pretty sure you are being laid-off. Get the least expensive plan possible, with the fewest minutes, and actually use the phone only for emergencies or as a contact during the job search. Or, be radical and cut out the service altogether.

If you eat out less and cut entertainment expenses, you could find $200 to $300 in your budget, which will at least help pay for (some) gas to look for another job.

Here are some things to consider if you've already lost your job:

— I cannot emphasise this enough: Cut expenses without delay.

— Apply for unemployment if you are eligible. Do not be too proud. Unemployment is an insurance fund that has been funded on your behalf by your employer.

— If you can, maintain your health insurance. Employers are required by law to offer the option of continuing your health insurance up to 18 months through the health benefit provisions of COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1986). The problem for many people is they have to pay the full amount for the coverage plus an administrative charge. If you are married, find out if you can join your spouse's plan as a result of the job loss.

Although COBRA can be expensive, the alternative could be worse. Having a serious medical problem without health insurance could trigger significant financial difficulties. If your company plan is particularly expensive, you could reduce your premium by opting for higher out-of-pocket co-payments or deductibles. Also consider getting catastrophic coverage, which will pay for a major illness.

— Tap into retirement money only if things have become dire. By that I mean you are running out of food or you've exhausted every means to pay your mortgage or rent. You may be able to take a "hardship withdrawal" from your plan, if it's allowed by your former employer. A hardship withdrawal is not a loan. You can't put the money back into your portfolio later.

Also, the withdrawals are subject to taxes and a 10 percent penalty if you are not at least 59-and-a-half. Check with the plan provider to see if it allows for hardship distributions and under what conditions.

If you have a Roth IRA you can withdraw your original contributions without a penalty. If you have a traditional IRA you may avoid the 10 percent penalty if the early withdrawals are used for certain qualified expenses.

Finally, if you're having trouble finding employment, be willing to take anything you can get with perhaps evening or weekend hours so you can leave your days open to look for a better job. Do not let your pride get in the way of earning something - anything - to help with the bills.

Listen to Michelle Singletary discuss personal finance every Tuesday on NPR's "Day to Day". To hear her reports online go to www.npr.org. Readers can write to her c/o The Washington Post, 1150 15th St., N.W., Washington, DC 20081. Her e-mail address is singletarym@washpost.com Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

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