James has a yearly salary of $34,800. His employer withholds $3870 in state and federal taxes and $2554 in FICA taxes throughout the year. He has the following monthly costs: transportation is $240, cell phone bill is $95, 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 $270, internet is $100, health insurance is $341, and groceries are $320. 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' monthly expenses:

Transportation: $240
Cell phone bill: $95
Student loans: $200
Rent: $675
Utilities: $270
Internet: $100
Health insurance: $341
Groceries: $320

Total monthly expenses: $240 + $95 + $200 + $675 + $270 + $100 + $341 + $320 = $2141

Now, let's calculate James' monthly take-home pay after taxes:

Yearly salary: $34,800
State and federal taxes withheld: $3870
FICA taxes withheld: $2554

Total taxes withheld: $3870 + $2554 = $6424

Yearly take-home pay: $34,800 - $6424 = $28,376
Monthly take-home pay: $28,376 / 12 = $2364.67

Finally, let's calculate how much money James has left each month for discretionary spending:

Monthly take-home pay: $2364.67
Total monthly expenses: $2141

Discretionary spending: $2364.67 - $2141 = $223.67

James has $223.67 left each month for discretionary spending after all necessities are accounted for.