Super Duper Scared and Anxious

If he quits first, he cannot get unemployment.
If the company lays him off, he can get unemployment.
Then, being self-employed, find out how that impacts his ability to collect unemployment for now or not. And for how long.
IF he can get unemployment, then that will be extra money... for you all to save.
SO... for now, he should wait until he is laid off.
Because if HE quits, he CANNOT get unemployment.
And you all will need, the unemployment money.

Then hopefully, you all have "emergency" money saved... and a retirement fund.

Also being self-employed, he will need to "buy" his own medical insurance etc.
Do you work? Or not? If not, then you and your children will need medical coverage.
IF he is laid off, he can sign up for COBRA coverage. But this is also expensive.

And also, he needs to work on client retention.

Working from home, is still working. And the kids will need to understand that it is not Daddy being home all day to play or whatnot. He is not a stay-at-home-daddy. He is still, a working, Dad. He will need, to be in the home office, for work hours. And he has clients to tend to.

My situation is slightly different, but similar. First, if your husband thinks he's going to be fired, let it happen. He can at least get unemployment while he revs up his business - I'm guessing here on how unemployment works.

Second, do you have any savings to fall back on during 'slow' business times? You should build up to at least 3 months worth of expenses and don't touch that unless you have to. That's your emergency fund. It's better to have more, but aim for 3 months first.

As for budget crunchers, some basic suggestions are: buy and cook food based on what's on sale each week. Make some things in bulk and freeze (if you don't have a freezer, I recommend saving to get one). Start making most or all of your own food at home (you've already mentioned lessening fast food, so that's good). Make a budget of your expenses as they are now - track your spending and analyze your habits. What seems outrageously high and can or should be cut? What can be reduced? Are there alternatives or less expensive versions of things you buy regularly? If you're a coupon person, start learning how to use them. Visit budget related sites/blogs for more ideas. In your budget, don't forget to have a fun category, but make savings a priority.

First and foremost - support him!!

DO NOT let him quit his job. If they lay him off or fire him - he MIGHT get unemployment or a severance. Which is of SOME comfort.

This is an adventure!! I would TOTALLY support my husband in his endeavors!! Especially one that makes him his own boss!!!

Budget crunchers?
1. CASH ONLY.
2. Refinance your mortgage to the lowest payment possible (you'd have to do this before he gets laid off()
3. Call electric, gas, water, cable etc and see if there is a flat-rate program you can enroll in.
4. Turn thermostat DOWN in the winter - wear sweatshirts and slippers
Do the opposite in the summer...use fans
5. Cut out "new" - go to Goodwill or other thrift stores to shop for clothes, etc. you will be surprised at what you get.
6. change your car insurance deductible - make it higher to lower your rates.
7. If you have paid off cas - great !!! if you don't - consider selling them and for ones that you can afford on a lesser income.

want an influx of money? Sell things you do NOT need or use anymore on craigslist or ebay.

Daddy working from home - he is STILL WORKING!!! This does NOT mean he gets to go play and run around - he is WORKING!!!!! This is HUGE!!! I work from home and people were confused about that....especially my kids - I'm here so they think I can sit and watch a movie or play...this needs to be explained...

GOOD LUCK!!!

One ot the things he needs to start doing is marketing and advertising. The big mistake that so many business owners make is to not tell people they are there and open for business. Even just advertising in trade publications helps or in online business marketing or a facebook page --- something.

Look at it as an adventure and a learning experience.

We have this much money for entertainment this month, kids. How much fun can we pack into it for this amt of money? You need to be looking at stretching recipes, cook once, eat twice kind of things. The kids need to know they have to be more thoughtful and careful these days with their health and avoid accidents.

The library is your friend for many things. Cookbooks for food ideas and entertainment. Recycle is the name of your game. Barter all you can.

Good luck with your new business!

I agree with people saying not to quit bc then he can't get unemployment etc but the fact that he's about to get fired also raises a few questions - well, one question and that's "why is he getting fired?" The why could be very impt is how his new business does... I'd kind of want to explore that. He's calm about it but will it hurt his reputation to be fired? Will potential clients hear and then be less apt to hire him? Is there something he can do to salvage things? Is he lacking an impt skill that he should focus on while he can etc? It may be too late but that would have me concerned too. Not to add to your worries... Health insurance would be my chief concern so I definitely think looking into cobra or some other form is impt. Otherwise, people have given good cost savings advice. Can you work at all?