2 ways to prepare your finances for the coronavirus

Here are 2 ways to prepare your finances for the coronavirus, there are going to be some interesting opportunities in the coming weeks.

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The coronavirus continues to spread, with the US officially reporting its first death and the number of cases continue to rise across the world.

The US Federal Reserve has indicated that it may take action to help support the market, but we'll see if that helps.

There are at least two things that people can do to help their finances:

Build an emergency fund

One of the best pieces of financial advice is to have an emergency fund. I've often said that everyone should have at least $1,000. Families should probably aim for at least two or three months of expenses locked away in a high interest savings account.

We never know when an emergency is going to come, or how severe it will be. Hopefully Australia's coronavirus numbers stay at the current low level, but I think it would be prudent to increase the size of your emergency fund a little bit, even if it's just by a few hundred dollars.

China is already warning that it could be several weeks before the country returns to normal operations with its factories, schools and so on. Many analysts believe global supply chains related to China will be impacted for some time because of the backlog. The AFR reported that production at China's small and medium-sized companies was just 32.8% of pre-suspension levels as of Wednesday, according to official data released on Thursday.

Supermarket giant Woolworths Group Ltd (ASX: WOW) has said there has been an increase in demand for food, with a large rise of demand for non-perishable food which has led to shortages in some stores. However, there are supposedly good supplies in the distribution centres so any stock shortages would be temporary and the company was working to shore up supply chains.

There are various advice pieces out there about what households can or should do to prepare, such as washing hands or buying a few more tins of food or pasta.

Prepare for investment opportunities

We have already seen the ASX 200 (ASX: XJO) and global share market fall around 10% over the past week. Some shares like WiseTech Global Ltd (ASX: WTC) have seen their share prices plunge over 20% because of worries about the coronavirus and supply chain disruptions.

There are going to be some more opportunities that open up because of this. The share market both here and globally recently hit all-time highs, so investors are being quick to take profit off the table and look for safety.

Over the past 15 years the best time to buy shares was during the GFC. That's why I'm planning to put some money to work next week and throughout March (and beyond).

These sell-offs don't come along very often and we have to take advantage of them when they come along. If Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) wasn't already such a large position in my portfolio, it would be the first one I'd be buying, but there are lots of other opportunities out there.

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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