Final answer:
After deducting living expenses and debt repayment from your paycheck, you will have available cash for other purposes. In this example, the available cash for discretionary spending would be a little over $1,000 per month.
Step-by-step explanation:
After deducting living expenses and debt repayment from your paycheck, you will have available cash for other purposes.
For example, let's say your take-home pay is $50,000 per year. Your monthly rent is $2,000, and other bills amount to $1,000 per month. To calculate the amount left for discretionary spending, you can divide the annual income by 12 and subtract the monthly expenses. Alternatively, you can multiply the monthly expenses by 12 and subtract the result from the annual income.
In this case, the available cash for discretionary spending would be a little over $1,000 per month.