I've survived an 18 month layoff primarily by living off savings accumulated by putting aside 33% of my income for just such a rainy day as this.
I didn't have big credit card debt built up. What little I had while I was working, I paid off as soon as I got laid off. I knew I couldn't afford to pay interest!
Also, I don't have cable TV. I shopped for the cheapest but fastest Internet service. My husband and I each have a cell phone from the cheapest provider in town – we don't have a landline. I rarely buy books, the library and its books/DVDs work fine for us.
Also, we both cook and rarely eat out. We buy a lot of groceries at Walmart, and I get my discounted prescriptions there (no health insurance) using a free discount program I found on the Internet.
When we do go out for something to eat, it's usually a snack, or an inexpensive breakfast or lunch. I rarely have drinks out, and when I meet my girlfriends out it's usually for coffee or tea.
I sold my gold jewelery that I didn't wear anymore (stuff that was out of style) and banked the proceeds. My husband sold musical and sports equipment he doesn't use anymore.
My husband and I both drive small, gas-efficient paid-off cars that are 10 yrs old. I try to be efficient about running errands, and am cautious about long drives – I might even run the stats on Mapquest to find out how much gas a long drive (there and back) will cost!
Yes, unemployment ran out. Yes, I work two part-time jobs. And yes, I still have some $$ saved, thank god.