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.
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.