James has a yearly salary of $28,700. His employer withholds $3052 in state and federal taxes and $2180 in FICA taxes throughout the year. He has the following monthly costs: transportation is $220, cell phone bill is $50, student loans require $180 in repayment, and rent is $350. He is using the average monthly costs for each of the following in order to gain an idea of other monthly expenses: utilities are $260, internet is $105, health insurance is $299, and groceries are $210. 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 we calculate James' total monthly costs for necessities:
Transportation: $220
Cell phone bill: $50
Student loans: $180
Rent: $350
Utilities: $260
Internet: $105
Health insurance: $299
Groceries: $210
Total monthly costs for necessities: $220 + $50 + $180 + $350 + $260 + $105 + $299 + $210 = $1674
Next, we calculate James' total yearly taxes withheld:
State and federal taxes: $3052
FICA taxes: $2180
Total yearly taxes withheld: $3052 + $2180 = $5232
Now we calculate James' total yearly income after taxes:
Yearly salary: $28,700
Total yearly taxes withheld: $5232
Total yearly income after taxes: $28,700 - $5232 = $23,468
Now we calculate James' total monthly income after taxes:
Total yearly income after taxes: $23,468
Total monthly income after taxes: $23,468 / 12 = $1972.33
Now we subtract James' total monthly costs for necessities from his total monthly income after taxes to find how much money is left each month for discretionary spending:
Total monthly income after taxes: $1972.33
Total monthly costs for necessities: $1674
Money left for discretionary spending each month: $1972.33 - $1674 = $298.33
Therefore, James has $298.33 left each month for discretionary spending after all necessities are accounted for.