What Happens if the Car Breaks Down?

Miranda is a single mother of two, struggling to make ends meet. Her salary of \($40,000\), after taxes and childcare expenses, doesn’t go very far. Miranda is a careful budgeter, and she has been setting aside \($40\) per month for Christmas presents for her kids. By October, she is proud to have \($400\) in her savings account. But disaster strikes: Her car breaks down, and the mechanic tells her the cost of fixing it will be $350.

1. What are Miranda’s options?

2. Taking Miranda’s situation into consideration, at what stage is she in her comprehensive financial plan? Which elements do you think she needs to focus on in the short term (one year or less)? Which elements should she focus on over the next five years?