Your realized income from your primary job is $2,034.24/month. Your fixed expenses are 30% of your primary job’s realized income. You have a second job that pays $9.50/hr with deductions of FICA (7.65%), federal tax withholding (11.5%), and state tax withholding (7.75%). If you want to save enough in the next 10 months to have an emergency fund that will cover 5 months using only 20% of your discretionary monies from your primary job, how many hours per month do you need to work at your second job to meet your monthly savings goal?
First, calculate your fixed expenses:
Fixed expenses = $2,034.24 * 0.30 = $610.27/month
Next, calculate your discretionary income from your primary job:
Discretionary income = $2,034.24 - $610.27 = $1,423.97/month
Calculate the amount you want to save each month:
Monthly savings goal = $1,423.97 * 0.20 = $284.79/month
Calculate your net pay per hour at your second job after deductions:
Net pay per hour = $9.50 * (1 - 0.0765 - 0.115 - 0.0775) = $9.50 * 0.730 = $6.935
Finally, calculate the number of hours you need to work at your second job to meet your monthly savings goal:
Hours needed per month = $284.79 / $6.935 ≈ 41 hours
You need to work approximately 41 hours per month at your second job to meet your monthly savings goal.