ames has a yearly salary of $29,700. His employer withholds $3336 in state and federal taxes and $2641 in FICA taxes throughout the year. He has the following monthly costs: transportation is $240, cell phone bill is $70, student loans require $200 in repayment, and rent is $675. He is using the average monthly costs for each of the following in order to gain an idea of other monthly expenses: utilities are $120, internet is $85, health insurance is $293, and groceries are $190. How much money is left each month for discretionary spending after all necessities are accounted for? Round your answer to the nearest cent, if necessary.

Answer 1

First, calculate the total monthly costs for James:
Transportation: $240
Cell phone bill: $70
Student loans: $200
Rent: $675
Utilities: $120
Internet: $85
Health insurance: $293
Groceries: $190

Total monthly costs = $240 + $70 + $200 + $675 + $120 + $85 + $293 + $190 = $1873

Next, calculate the total monthly deductions from James's yearly salary:
State and federal taxes: $3336 / 12 = $278
FICA taxes: $2641 / 12 = $220.08

Total monthly deductions = $278 + $220.08 = $498.08

Finally, calculate the amount of money left each month for discretionary spending:
Yearly salary = $29,700
Monthly salary = $29,700 / 12 = $2475
Money left after all deductions = $2475 - $498.08 = $1976.92
Money left after all necessities = $1976.92 - $1873 = $103.92

James has $103.92 left each month for discretionary spending after all necessities are accounted for.