First, calculate your weekly income before deductions:
$13.70/hr * 40 hr/wk = $548/week
Next, calculate your weekly deductions:
FICA: $548 * 7.65% = $41.97
Federal tax: $548 * 11.55% = $63.33
State tax: $548 * 8.35% = $45.79
Total weekly deductions: $41.97 + $63.33 + $45.79 = $151.09
Net weekly income: $548 - $151.09 = $396.91
Calculate your monthly realized income:
$396.91/week * 4 weeks/month = $1587.64/month
Calculate your housing and fixed expenses:
$1587.64/month * 30% = $476.29
Calculate your monthly savings goal:
Emergency fund = $1587.64/month - $476.29/month = $1111.35
Calculate 6 months worth of savings:
6 months * $1111.35/month = $6668.10
You need to save $6668.10 in your emergency fund.
You are paid $13.70/hr. You work 40 hr/wk and your deductions are FICA (7.65%), federal tax withholding (11.55%), and state tax withholding (8.35%). Your housing and fixed expenses are 30% of your realized income per month and you want to save 6 months worth in an emergency fund. How much do you need to save?
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