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It's a hot summer afternoon outside Toronto's City Hall and amid the throng of picketing unionized city workers, a dark-haired young woman with a strike sign hanging from her neck is as worried about her wallet as her job.

“I have steep student debt and I just got a new apartment,” she said. The woman, who declined to give her name, fears the largest municipal walkout in Canadian history will dent her fragile finances and hurt her credit rating. “I really need to be working right now. I can't afford not to.”

Workers who belong to a trade union should take steps to be prepared for a strike or management lockout, which can have a devastating impact on a family's financial situation. This is especially true when the striking worker is the sole breadwinner, or in the case that both spouses are out of work.

“ This is a brutal thing to go through, especially since people have no idea when it will come to an end. ”— Accountant Christie Henderson

Christie Henderson, a chartered accountant at Henderson Partners LLP in Oakville, Ont., says the uncertainty surrounding the duration of any work stoppage is one part of what makes a labour contingency plan crucial.

The 24,000 Toronto city workers who walked off the job more than two weeks ago have no idea when they will see their next paycheque. A similar civil strike in Windsor is dragging on into its 12th week, with no end in sight. In British Columbia, 3,500 paramedics and emergency dispatchers have been on strike since April 1st, although a ruling has deemed them an essential service and prevented them from stopping working. For a list of all the major work stoppages in Canada for 2009, click here.

“This is a brutal thing to go through, especially since people have no idea when it will come to an end,” Ms. Henderson said. “They could be off for two days or two months.”

Regardless of the duration, a well thought-out financial plan can lessen the impact and stress of any labour strike or walkout.

Build up a strike reserve
Unionized workers should have a strike war chest of easy-accessible cash built up, says Dave Diesslin, a certified financial planner with Diesslin & Associates Inc. in Fort Worth, Texas. He advises setting aside three months worth of income, although other planners say six weeks is a sufficient starting point.

“If you have a strike and no reserves, you choices are limited,” Mr. Diesslin said in an interview. “Then you are getting a crash course in how to be ready for the next one.”

Check with your union
Find out what kind of salary continuance plans your union provides. Most unions have a strike fund which pays a small weekly amount to members who are on strike or locked out. Although it is generally a pittance, it can cover the cost of groceries. The Canadian Union of Public Employees pays its striking members $40 a day – to a maximum of $200 a week – provided they picket or perform other duties.

Many unions will write letters on behalf of members and accompany them to their financial institution to work out some sort of arrangement on big-ticket items like mortgages and car loans. Some unions have hardship funds to help members who may require assistance over and above strike pay.

“Some locals have emergency funds, so if a member is facing foreclosure they can lend them some money on a short-term basis,” CUPE national representative Brian Blakeley said.

Workers should check to see if they will be receiving benefits while they are not working, he added. If not, they should consider filling prescriptions and taking care of necessary dental work before the strike begins.

Prepare a budget
Once you are aware of how much – or how little – money you will have coming in while you're on strike, make a detailed list of all your monthly expenses, in order of importance. Divide the list into fixed and variable costs, with mortgage payments, rent, food and utility bills falling into the fixed category and haircuts, restaurant meals and vacations falling under the latter. Sit down with your spouse and family to identify which costs – starting with the variables – can be cut. Then come up with a weekly budget, a strict spending cap that everyone must adhere to.

“Sit down and calculate how long you have to run before you run out. Once you have that snapshot you can run a forecast,” Mr. Diesslin said. “Make sure all family members understand that allowances are cut and family vacations are on hold.”

Plot your financial options
If it appears that you will not be able to make a major payment, such as a mortgage or credit card, pick up the phone and see if something can be arranged. Many lenders are receptive to deferring payments and some will let you skip a month on your mortgage payment or make an interest-only payment on your home line of credit.

The worse thing you can do is avoid opening the letters or answering the phone, and missing payments completely. “If you choose to bury your head in the sand, you could end up hurting your credit rating,” Ms. Henderson said. “Deal with this head on.”

Other options include refinancing your mortgage at a lower rate or extending the amortization, renegotiating your insurance premiums, consolidating debt to a lower interest rate, and renegotiating the rates on your cell phone, cable or Internet bill. Review your credit cards and postpone any big purchases until the work stoppage is over.

Roma Luciw is a writer and web editor of the Globeinvestor.com personal finance site. Please send any comments and story ideas to rluciw@globeandmail.ca.