James has a yearly salary of $31,600. His employer withholds $3014 in state and federal taxes and $2685 in FICA taxes throughout the year. He has the following monthly costs: transportation is $240, cell phone bill is $80, student loans require $300 in repayment, and rent is $575. He is using the average monthly costs for each of the following in order to gain an idea of other monthly expenses: utilities are $280, internet is $55, health insurance is $319, and groceries are $230. 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.
To calculate the monthly amount left for discretionary spending, we first need to calculate James' total annual deductions and monthly costs.
Total annual deductions:
State and federal taxes: $3014
FICA taxes: $2685
Total annual deductions = $3014 + $2685 = $5699
Total annual costs:
Transportation: $240 * 12 = $2880
Cell phone bill: $80 * 12 = $960
Student loans: $300 * 12 = $3600
Rent: $575 * 12 = $6900
Utilities: $280 * 12 = $3360
Internet: $55 * 12 = $660
Health insurance: $319 * 12 = $3828
Groceries: $230 * 12 = $2760
Total annual costs = $2880 + $960 + $3600 + $6900 + $3360 + $660 + $3828 + $2760 = $24748
Total annual discretionary spending = $31600 - $5699 - $24748 = $11253
To find the monthly discretionary spending, we divide the total annual discretionary spending by 12:
Monthly discretionary spending = $11253 / 12 = $937.75
Therefore, James has $937.75 left each month for discretionary spending after all necessities are accounted for.