James has a yearly salary of $38,800$⁢38,800. His employer withholds $5432$⁢5432 in state and federal taxes and $3802$⁢3802 in FICA taxes throughout the year. He has the following monthly costs: transportation is $150$⁢150, cell phone bill is $55$⁢55, student loans require $300$⁢300 in repayment, and rent is $650$⁢650. He is using the average monthly costs for each of the following in order to gain an idea of other monthly expenses: utilities are $160$⁢160, internet is $65$⁢65, health insurance is $374$⁢374, and groceries are $280$⁢280. 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.

Let's break down the problem step by step to find out how much money James has left for discretionary spending each month after all his necessary expenses are accounted for.

### Step 1: Calculate James' annual net income.
- **Gross yearly salary**: \$38,800
- **State and federal taxes**: \$5,432
- **FICA taxes**: \$3,802

The net annual income is calculated by subtracting the taxes from the gross salary:
\[
\text{Net yearly salary} = 38,800 - (5,432 + 3,802) = 38,800 - 9,234 = 29,566
\]

Now, to find the monthly net income:
\[
\text{Monthly net income} = \frac{29,566}{12} \approx 2,463.83
\]

### Step 2: Calculate James' total monthly expenses.
James' monthly costs include:

- **Transportation**: \$150
- **Cell phone**: \$55
- **Student loans**: \$300
- **Rent**: \$650
- **Utilities**: \$160
- **Internet**: \$65
- **Health insurance**: \$374
- **Groceries**: \$280

Now, summing these expenses:
\[
\text{Total monthly expenses} = 150 + 55 + 300 + 650 + 160 + 65 + 374 + 280 = 2,034
\]

### Step 3: Subtract the total monthly expenses from the monthly net income.
\[
\text{Money left for discretionary spending} = 2,463.83 - 2,034 = 429.83
\]

Thus, after accounting for all necessities, James has approximately **\$429.83** left each month for discretionary spending.

Would you like a more detailed breakdown of any of these steps? 

Here are 5 related questions:
1. How would James' discretionary income change if his rent increased by \$100 per month?
2. What percentage of James' net income is spent on rent alone?
3. How would James' discretionary spending change if his student loan repayment decreased by \$50 per month?
4. What would be James' annual discretionary income?
5. If James' employer increased his salary by 5%, how much more would he have for discretionary spending each month?

**Tip**: It's always useful to track monthly expenses to understand where you might be able to save for future goals or emergencies!

James has a yearly salary of $38,800. His employer withholds $5432 in state and federal taxes and $3802 in FICA taxes throughout the year. He has the following monthly costs: transportation is $150, cell phone bill is $55, student loans require $300 in repayment, and rent is $650. He is using the average monthly costs for each of the following in order to gain an idea of other monthly expenses: utilities are $160, internet is $65, health insurance is $374, and groceries are $280. 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.

Learn how to calculate the monthly discretionary spending for James, who earns $38,800 a year and has various monthly expenses, including rent, utilities, and groceries. Follow a step-by-step solution to determine how much money is left after accounting for all necessities. Suitable for Grades 9-12.

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