Philip Vanden Berge says he hasn't heard of The Dilbert Principle, yet his story is the stuff of Scott Adams' e-mail. At age 50, he led negotiations for the sale of his employer, Bilmar Foods in Grand Rapids, Mich., to Sara Lee Corp. In the process, he negotiated himself out of a job.

"Thank God the kids were out of college," says Mr. Vanden Berge, who says that after borrowing $70,000 from his cash-value life insurance to cover tuition, his savings were gone. Another godsend was the advice he received from his financial consultant, who helped him handle the economic anxieties that came with rebuilding his professional life.

You can learn to manage your finances effectively after a job loss by taking a few lessons -- both in what to do and what to avoid -- from those who have bounced back from corporate layoffs. The key is to act now to reduce your spending and put your family on a conservative budget before creditors come knocking.

A Pleasant Ending

Unlike the Dilbert comic strip, Mr. Vanden Berge's story turned out well. Following the sale of Bilmar, Mr. Vanden Berge was asked to return for three more years. But when he was offered a new position at Sara Lee that required a long-distance move, he turned it down. At age 54, he didn't want to leave the community where he and his wife, Mary, had raised their four children.

Soon after, "an industrial psychologist at Bilmar advised me to do nothing for six months, but I couldn't do it," Mr. Vanden Berge says. "It was good advice" he mistakenly ignored. With money in his pocket, he bought into a wood-pallet shop, a deal that turned sour after a year and left a bad taste in his mouth.

Today, Mr. Vanden Berge is more careful. He and his wife drive used cars, and he's taken on a boatload of assignments to stay busy and protect himself from future downturns. He now consults part time for Coopers & Lybrand, serves as a temporary chief financial officer of the Calvin Theological Seminary in Grand Rapids, and is a 25% owner of a computer accessory equipment business. These positions supplement his investment income, and give him time to serve on four different boards.

"I've found a level of involvement I'm comfortable with," says Mr. Vanden Berge. "I play a lot of golf, I feel stimulated, I do the things I want to do and I'm involved as I want to be to generate sufficient income. And I feel blessed for that."

Stay Positive

When making financial plans after a job loss, your first step should be to avoid negative information. "When facing a downsizing, it's very easy to collect stories about people who went into the toilet," says Californian Richard Nelson Bolles, author of the best-selling job-search guide, "What Color Is Your Parachute?" (Ten Speed Press). "There are other stories of people who've made it."

At the same time, don't ignore your negative feelings. "Very often, your initial feelings after being downsized are similar to what you'd go through after a death," says Barbara O'Neill, author of "Saving on a Shoestring" (Dearborn Financial Pub.) and a professor at Rutgers University in New Brunswick, N.J. These feelings can include denial, isolation, anger, fear, depression and, ultimately, hope. "Not everyone will go through all of these stages, and the stages aren't necessarily sequential," Prof. O'Neill says. "Everybody reacts differently, just as with any kind of stress."

When trying to determine how much money you'll need to survive unemployment, beware of oft-quoted statistics. One of the most notorious says that for every $10,000 in income you hope to earn in your next job, expect to spend one month job hunting. "That statistic has never been substantiated," says Mr. Bolles. "It's one of those figures that's been bandied about, but no one knows where it came from. It doesn't take into account how many hours per week you devote to your job hunt. If you spend one hour a week, you could be looking for years."

Mr. Bolles recommends spending at least 35 hours each week on your search, thus treating it like a full-time job. In contrast, he cites a well-documented statistic from the U.S. Census Bureau which reports that two-thirds of all job hunters spend five hours or less on their job hunts each week.

To help ease your financial anxieties, ask your former employer about benefits for exiting employees. It may print and distribute manuals that outline your options. You'll need to know all the details of your severance package, so you understand exactly what assistance you can expect to receive.

At this stage, having a good friend who can help you keep your perspective is critical. Your family often is too close to the situation to be objective, so turn to others who can provide logical thinking and guidance. If need be, seek help from a financial planner or career counselor.

Get Coverage

After losing a job, be sure to buy an individual health insurance policy as soon as possible. Under COBRA, you can continue to receive medical insurance through your employer for 18 months; however, you'll have to foot the entire bill, plus an additional 2% to cover the employer's handling fee. Also, "if anything happens to you or your family during that 18-month period, and heaven forbid, you haven't found employment, you could become uninsurable through an individual policy," says Prof. O'Neill.

Investigate the possibility of joining your spouse's health-insurance plan, or receiving a lower group rate through a professional or trade organization. The membership fee often is offset by the discount on your insurance policy.

If possible, take advantage of your former employer's resources. Herman Miller Inc., the Zeeland, Mich.-based furniture manufacturer largely responsible for the proliferation of the cubicle, created an in-house career transition center for exiting employees following recent layoffs. The center provides computers, telephones, directories, a conference room and free long-distance telephone access. Many employers also offer help with resume writing, saving you the cost of such services, and seminars on financial planning and entrepreneurism.

Such resources helped Dennis Kellermeier launch a retail business after a 23-year career at Herman Miller. Drawing on a combination of market knowledge he'd gleaned from college courses, 26 weeks of severance checks and outside capital, the former overseas marketing manager incorporated ReThink Good Things, a store specializing in products to help consumers reduce waste through recycling.

"People are waking up to the fact that there's a risk even in the corporate world," says Mr. Kellermeier, when asked about the risks of self-employment. "Never think that what you're doing is what you'll always be doing."

"Twenty years ago, people were ashamed to be fired," adds Prof. O'Neill. "Today, you need to prepare financially for unemployment and plan for it. It's a new mindset. The more you plan, the better off you'll be."

Don't Cash In Your Chips

If your job search drags on, or an attempt at entrepreneurship leaves you cash-poor, do everything you can before tapping into your retirement savings. If you cash out your 401(k) plan, for example, you'll lose up to 40% to taxes. You're better off having your former employer transfer your retirement funds into a separate individual retirement account. Later, if you choose, you can transfer those funds to a new employer's retirement plan. Just be sure to have the employer transfer your money and keep the funds in a separate IRA. If you mingle other money into your account, you won't be allowed to transfer it to another employer's plan.

"The transition is hardest for [people] with no retirement savings and for those with credit-card debt," Mr. Kellermeier recalls. "They panic, because they always thought they'd be with the same company."

If your checkbook is near zero and the combination of severance and unemployment compensation isn't enough, contact your creditors. Trying to find a job while agonizing over unpaid bills can be a nightmare. Realize first that you're not alone. According to the Journal of Financial Planning, highly educated, upper-income families are more likely to overspend their income than those with less schooling and lower income.

Next, start negotiating for lower payments, forbearance or a moratorium on interest. Prof. O'Neill, also a certified financial planner, suggests having an amount in mind when you call. Keep records of everyone you speak with and when, and follow up with confirmation letters.

"If you wait until you're already behind on your payments, your creditors will be less flexible," she says.

Beware of Stop-Gap Jobs

When money is tight, your temptation may be to grab the first paying position that comes along. But Mr. Bolles recommends proceeding cautiously, especially if you accept a short-term job that you'd hate if it were anything but temporary.

"The danger of taking a stopgap job is that you start to think, 'Well, it's not so bad,' and you cut your dreams way down so that years later, you realize you've settled," says Mr. Bolles. "A stopgap job is a wonderful idea, but you must not get comfortable unless it becomes a dream job."

Once you land a new position, apply the financial lessons you've learned to keep from overspending. You never know when a new job won't work out, so use the first year or two to reduce your debt and rebuild your nest egg.

Ms. DeLapa is editor of Loose Change and 4 BITS, personal-finance newsletters published by the Financial Literacy Center in Kalamazoo, Mich.