James has a yearly salary of $33,300. His employer withholds $4995 in state and federal taxes and $3463 in FICA taxes throughout the year. He has the following monthly costs: transportation is $230, cell phone bill is $75, student loans require $210 in repayment, and rent is $625. He is using the average monthly costs for each of the following in order to gain an idea of other monthly expenses: utilities are $220, internet is $85, health insurance is $312, and groceries are $250. 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, let's calculate James' annual net income after taxes:

Annual salary: $33,300
Total taxes withheld: $4995 + $3463 = $8458
Annual net income: $33,300 - $8458 = $24,842

Now, let's calculate James' total annual costs for necessities:

Transportation: $230 x 12 = $2760
Cell phone bill: $75 x 12 = $900
Student loans: $210 x 12 = $2520
Rent: $625 x 12 = $7500
Utilities: $220 x 12 = $2640
Internet: $85 x 12 = $1020
Health insurance: $312 x 12 = $3744
Groceries: $250 x 12 = $3000

Total annual costs: $2760 + $900 + $2520 + $7500 + $2640 + $1020 + $3744 + $3000 = $23,084

Now, let's calculate James' monthly discretionary spending:

$24,842 (annual net income) - $23,084 (total annual costs) = $1758

Monthly discretionary spending: $1758 / 12 = $146.50

After all necessary expenses are accounted for, James has approximately $146.50 left each month for discretionary spending.