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AS MANY ECONOMIC Cassandras predicted earlier this year, the ranks of the unemployed are on the rise. Even worse: The damage is no longer confined to home builders and real-estate outfits. Now, workers in industries across the board from financial services to pharmaceuticals are feeling the pain.

Last month, the Labor Department reported that the jobless rate hit 5.5% the highest level reported since October 2004 and a significant jump from the 5% rate reported a month earlier. And according to economists at the Federal Reserve and UCLA, unemployment will most likely remain at these levels, if not move higher, and stay there well into 2009. In fact, the latest economic forecast from UCLA's Anderson School of Management projects that the unemployment rate will hit 6% by the end of 2009.

Given those dismal projections, it's a good time for workers to consider how they'd cope financially if they lose their job. If that trusty emergency fund meant precisely for the kind of unexpected loss of income brought on by a layoff isn't very well-endowed (or is, perhaps, nonexistent), here are some things you should do to stay afloat while awaiting your next paycheck.

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Negotiate

While not required to do so by law, many employers offer laid-off employees severance packages. Typically, these packages are on the table for a limited amount of time. Pay is usually based on the employee's length of service. (One employee may qualify for an amount equal to two weeks of salary while another, for as much as a year's worth.) The good news: Employees, especially those who've been at the company for many years and have a stellar service record, can often negotiate a better deal.

Try to cash in unused vacation days, for example, says Laura Moskowitz, staff attorney at the National Employment Law Project (NELP), a nonprofit that helps low-wage workers and the unemployed. Employers in 24 states including California, Massachusetts, Kentucky and Illinois are required by law to include unused vacation pay in an employee's final paycheck, according to Workplace FairnessFor more on negotiating severance and handling buyout offers, see our story

File for unemployment benefits promptly

Even while receiving a severance package from your employer, you're entitled to unemployment benefits. Just make sure to file for those benefits right away because once you apply, there's usually a few weeks lag time until the first check arrives.

Unemployment benefits won't replace your old salary the average benefit payment was $300 a week in the first quarter of this year, according to the Department of Labor. The amount varies based on your previous salary, and benefits plateau when the previous salary reaches a state's maximum, explains Bruce Nissen, a labor studies professor at Florida International University in Miami. To find out what you're entitled to, check your state's unemployment program at CareerOneStop, a site sponsored by the Labor Department. To calculate your expected benefits, use the Economic Policy Institute's online calculator.

Depending on the industry you worked in or the circumstances of your layoff, extended benefits or subsidized training may be available to you through a government program called Trade Adjustment Assistance (TAA). The TAA assists those who've been laid off due to increased imports from, or shifts in production to, other countries, says Maurice Emsellem, public policy director at NELP. Lose your factory job because the company moved its manufacturing facilities to China, and you may be entitled to up to two years of subsidized retraining and up to 52 weeks of extended unemployment benefits, according to the Department of Labor. Check the department's web site for application information.

Assess health-insurance options

If you can't join your spouse's employer-sponsored health plan, consider either extending your previous coverage through COBRA or buying an individual policy.

Under COBRA, workers keep the coverage they had through their employers without worrying about getting turned down due to illness or a pre-existing condition. This option is pricey, though: You'll pay the entire premium plus a 2% administrative fee, which for a family, could top $1,000 a month. If you're "the head of a family or middle-aged and have higher use of medical services, then COBRA would make more sense," says Susan Brown, a certified financial planner at Back Bay Financial Group in Boston.

If you're young and healthy and just want coverage for medical emergencies, then look into private insurance, says Ted Toal, a certified financial planner at Triton Wealth Management. These health plans have lower premiums on average $344 a month for families and $148 for individuals but carry much higher deductibles.

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You're out of a job, have bills to pay and your savings account is dwindling. Your 401(k) might be calling your name, but tapping into the retirement account should always be your last resort, says Brown.

Beyond the fact that you're dipping into your nest egg, the biggest problem here is Uncle Sam: Say a laid-off worker in the 30% tax bracket withdraws $10,000 from his tax-deferred retirement account. Not only will he pay $3,000 in income taxes, he'll also pay a federal penalty of 10%. Once everything is paid out, he'll be left with just $6,000 in spending cash, says Toal.

For more on withdrawing from your 401(k) before you retire, see our story.

Rely heavily on a HELOC

Thinking about getting a new home equity line of credit to help get you through the dry spell? Think again. Getting approved for a HELOC is tough these days. Many banks are either decreasing available lines or closing them altogether not to mention that it will be especially tough to qualify for one if you're unemployed.

If you have an existing line, however, tapping into it might be an option, says Brown. But that's only assuming "you'll be good about repaying it when you do start getting income," she says. Just keep in mind that using a HELOC as a cash source carries risks: If you go "longer than expected without a job, [your] home might be in jeopardy," warns Toal.

Overuse your credit cards

Interest rates alone should be enough to keep people from using their credit cards too much. If a payment is late even by one day your card issuer may jack the interest rate up to 20% to 25%, says Toal. Credit-card companies are also tightening lending standards and lowering credit limits for high-risk cardholders, which makes it that much costlier should you get into the habit of overcharging. If you're desperate for cash, take money out of a standard savings account or taxable investment account, such as a stock portfolio, before turning to your credit cards or 401(k), says Toal.