James has a yearly salary of $31,600. His employer withholds $3014 in state and federal taxes and $2685 in FICA taxes throughout the year. He has the following monthly costs: transportation is $240, cell phone bill is $80, student loans require $300 in repayment, and rent is $575. He is using the average monthly costs for each of the following in order to gain an idea of other monthly expenses: utilities are $280, internet is $55, health insurance is $319, and groceries are $230. 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

To calculate the monthly amount left for discretionary spending, we first need to calculate James' total annual deductions and monthly costs.
Total annual deductions:
State and federal taxes: $3014
FICA taxes: $2685

Total annual deductions = $3014 + $2685 = $5699

Total annual costs:
Transportation: $240 * 12 = $2880
Cell phone bill: $80 * 12 = $960
Student loans: $300 * 12 = $3600
Rent: $575 * 12 = $6900
Utilities: $280 * 12 = $3360
Internet: $55 * 12 = $660
Health insurance: $319 * 12 = $3828
Groceries: $230 * 12 = $2760

Total annual costs = $2880 + $960 + $3600 + $6900 + $3360 + $660 + $3828 + $2760 = $24748

Total annual discretionary spending = $31600 - $5699 - $24748 = $11253

To find the monthly discretionary spending, we divide the total annual discretionary spending by 12:
Monthly discretionary spending = $11253 / 12 = $937.75

Therefore, James has $937.75 left each month for discretionary spending after all necessities are accounted for.