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How To Save Money for College and Graduate Debt-free in 2023

  • Finance

Going to college is expensive. In this article, I’m going to walk you through the best ways to prepare and save money for college and reveal my journey on how I graduated from a 4-year university debt-free and with over $14,000 in my bank account.

Is it worth going to college? 

A college degree opens up many opportunities and minimizes barriers to pursuing professional careers. In the 21st century, many companies still look for candidates who have a college degree over those who don’t, unless they already have several years of working experience. Therefore, it is still worth going to college in my opinion, even though there are flaws in the college curriculum itself. 

According to, the average cost of college (COA) for an in-state institution in the United States is $25,707 per student per year, including books, supplies, and daily living expenses.

To afford this, many students turn to the quickest way to obtain the funds -student loans. 

Did you know? 55% of students from public four-year institutions had student loans, with an average of $28,950, according to Forbes. That is quite a scary number, especially if you’re still a student with no stable working income.

Although college is expensive, you don’t have to take out a loan. You can graduate from a four-year university debt-free. Yes, you heard it right, DEBT-FREE. 

My educational background

Oregon State University Valley Library taken by me

As a first-generation Asian immigrant, the cost of going to college is considered astronomical. My parents worked hard for me so that I could have a better life. And this was exactly the reason that I swore to never take a dime from my parent’s hard-earned money. 

I was determined to figure out my education on my own. In 2023, I graduated high school and received a scholarship from Clackamas Community College. I obtained the Associate of Arts Oregon Transfer (AAOT) degree in 2 years.

Then, I transferred to Oregon State University and got my Bachelor of Science in Business Information Systems and a minor in Computer Science. 

I had over $14,000 saved up by the time I graduated. That gave me a good start stepping into the workforce. 

How I graduated debt-free with $14,000 in my bank

  • I applied and received a scholarship to attend a community college.
  • I took all the core transferable classes at the community college for less than half the cost of a 4-year university.
  • I continue to apply for financial aid every year. 
  • I was working at the community college’s call center which further reduced my tuition. 
  • I lived at home during my 2 years at the community college. 
  • I transferred to Oregon State University as a Junior and continued working part-time as a web developer AND a restaurant server. 
  • I never owned a car. 
Click here to see a rough breakdown of my income and expenses during community college:
Part-time job as a Call Center Representative$3,750
Scholarships$3,500 (Year 1 only)
Federal Pell Grant$7,000
Misc. expenses$1,200
Total Income for 2 years$25,000$17,400
My income & expenses per year during community college

Net Income after 2 years in community college: $7,600

Click here to see a rough breakdown of my income and expenses during the four-year university:
Part-time job as Web Developer$9,600
Part-time job as a Waitress$11,520
Federal Pell Grant$7,000
Rent & Bills$8,400
Misc. expenses$1,500
Total Income for 2 years$56,240$47,800
Money saved from community college$7,600
My income & expenses per year during my four-year university

Net Income by graduation: $14,040

Apply Pareto’s 80/20 rule to your finances

Image source: Norbert Hires

There are many ways to save money before and during college, but here I’m going to focus on Pareto’s 80/20 rule, which states that 80% of the outcomes come from 20% of the causes. 20% of your financial decisions would yield 80% of money savings. Of course, there’s no harm in also doing the rest of the 80%. But the 20% that I’m going to show you below will make the biggest impact.

In my personal experience, 20% of the expenses that take up 80% of the cost are tuition, room and board, textbooks, and car (and maybe alcohol? ;)). 

The 3 simple principles I used

  • Maximize income
  • Minimize expense
  • Optimize savings

The things to do for each of the principles:

Maximize Income

  • Apply for scholarships and grants every year
  • Work part-time/side gigs

Minimize expense

  • Take Advanced Placement classes in high school
  • Attend a community college to complete all core classes. 
  • Share living space with a roommate
  • Don’t buy textbooks if possible
  • Don’t own a car unless it’s necessary
  • Eat out less

Optimize savings

  • Use credit cards to earn cash back and rewards
  • Put the money you save in a high-yield savings account
  • Start investing  

How to save money before college

Image by Photo Mix from Pixabay

How much should a 16-year-old have saved? How can I save for college at 16? Here are some of the best ways to prepare and save money before you go to college:

1. Take Advanced Placement (AP) classes in high school whenever possible

AP classes are college-level classes that are offered in most high schools. You can obtain college credits by taking the AP exams (which cost about $97/subject) AND score at least 3 and above (on a scale of 1-5). This allows you to bypass some general education requirements in college at a much cheaper cost. Each institution may require a different score in order to qualify for college credit. Do your research or consult your college advisor. 

2. Get a part-time job

Most high schoolers would have free time even if they participate in sports or clubs. You can easily squeeze time out by being more productive. Consider getting a part-time job. You’d most likely get paid minimum wage but hey, the money adds up quickly (the same goes with spending money). The earlier you start working, the sooner you take charge of your own financials (which is an awesome feeling). 

3. Apply for scholarships

Many students don’t like the hassle of applying for scholarships, myself included. It typically requires essays and some kind of letter of recommendation to prove that you’re an exceptional student. Despite the work required, scholarships are one of the best ways to save for college because it is free money and it is tax-free. The best part is – there is no limit to how many scholarships you can receive. Scholarship grants range from a few hundred to a few thousand dollars. Check out this guide on how to find scholarships and the best tips for winning college scholarships

4. Apply for federal grants

Federal grants work like scholarships, it is free money and tax-free. The only difference is that this is issued by the government as opposed to scholarships that typically come from independent foundations. The Federal Pell Grant Program is a financial-need-based grant for which you can receive up to $7,395/year. Be sure to do that each year and your future self will thank you later. Read more on Pell Grant and how to apply.

5. Consider attending a community college

The average tuition for community college is about $3,500 per year while the tuition for four-year in-state institutions is $9,500 per year. Attending community college is by far one of the best education decisions I’ve made despite the stigma around it. You can take all of the pre-requisite or core classes (typically takes about 2 years) at a community college and transfer your credits to a four-year university. Make sure to consult your college advisor to ensure the classes you take are transferable. 

How to optimize your finances during college

Image by weisanjiang from Pixabay

There are many ways to make and save money during college and this article gives you 50 ideas to save money and live on a budget. The 20% that I’d like to focus on is: 

1. Get a part-time job 

Most college students are enrolled as full-time students, which means they take at least 12 credits in a term which translates to 36 hours/per week. This is how much time you would typically need to engage in your classes (lectures, assignments, projects, etc.) Working part-time with the rest of your free time will not only help pay for college but also allows you to build expertise in the career path that you’re heading if you have a job in that field. After you graduate, you will not only have the credentials on paper but also have some experience to get yourself a good head start. There are also many job opportunities on campus if you prefer a job that lets you go between work and classes easily. 

2. Apply for scholarships (again)

To re-emphasize, receiving scholarships is by far the best way to pay for your college. Being a scholarship recipient gives you a sense of accomplishment and better yet, it can be listed on your resume which makes you stand out more from your peers. It takes hard work to search and apply, but it totally pays off if you landed on one. 

3. Apply for federal grants (again)

This one appears right here again because you should be applying for the grant every year. Take advantage as a student and apply for free money. Read more on Pell Grant and how to apply.

4. Share your living space with a roommate

Roommates can be annoying, but they may also become your best friends for life. Even if you can effort living on your own, sharing the living space with someone can save you a tremendous amount of money. Plus, having a roomie is part of the college experience! 🙂

5. Borrow textbooks from the library or buy used textbooks

Buying new textbooks should be your last resort. College textbooks are expensive (and thick). Most college libraries would have a copy of the textbooks. If not, consider getting a used one because 95% of the time you wouldn’t read your textbooks again after you graduated. To take this up a notch, resell them after you’ve completed the course. 

6. Don’t buy a car unless it’s an absolute need

Having a car is expensive. Insurance, gas, parking, maintenance, etc. All these expenses add up pretty quickly. From my experience, colleges usually have quite robust transportation systems and students typically get discounts on the fare. College campuses are also very bike friendly. Consider biking instead of driving and get some exercise in. 

How to optimize the money you have now

Image by Robert Owen-Wahl from Pixabay

1. Take advantage of a credit card and use it wisely

Instead of paying cash or using a debit card on your purchases, consider applying for a credit card that has no annual fee. Using a credit card not only builds up your credit score (which helps you get lower interest rates on loans or mortgages) but also earns you cash back and rewards over time. 

If you never had a credit card before, you most likely don’t have a credit score, which means it’d be harder for you to get approved for a credit card. If that’s the case, start by applying for a free checking account and use your debit card. Once you have consistent income rolling in, you can try applying for a credit card. The income in your checking account shows that you have spending power, and you will most likely get approved, starting with a low credit limit. As you consistently make your payments on time, your credit limit will slowly increase and you will have better credit card options. Note that it is not advised to own too many credit cards (2 is ideal) as it may negatively impact your credit score and it gets difficult to keep track of your expenses.

2.  Put the money you save in a high-yield saving account

I wish someone told me about this one earlier. For the first three years of working, I have been putting my savings in an account that only gives 0.01% interest. I should have kept it in a high-yield savings account of at least 4% and let my money grow there. Don’t make the same mistake I did. 

To give you an idea of the power of compounding interest, let’s say you have $10,000 in savings, and let’s say you make $2,000 a month, you’d ideally save $600 each month. A 0.01% interest rate bank will get you $17,201.36 while a 4% will give you $17,753.61 at the end of the year. It’s over a $500 difference in just a year, by simply putting your money in a high-yield account.

3. Start investing

This is another one I wish I have done during my college years. Set aside a small portion of your savings to invest in the stock market. Stocks fluctuate throughout the year but would typically increase in value over time. Long-term investments are great because you just buy once and forget them. Check back once a year and see your asset grows over time. Diversity your portfolio by investing in ETFs or mutual funds. Make sure to only invest the money you don’t need for living expenses or tuition. I personally use these brokers: Fidelity, Robinhood (Use my affiliate link to signup and link your bank account to receive $5-$200 stock in leading companies), and E*Trade.

Good money habits to build

1. Keep track of your expenses

Look at your bank statement every month and evaluate whether you’re spending too much. If so, categorize your expenses and identify what you’re spending the most on. Find a way to cut it out or find a cheaper alternative.

2. Apply the 50, 30, and 20 rules to your income

The “normal” 50-30-20 states that 50% should be spent on needs, 30% on wants, and saving the rest 20%. Here, I’d highly recommend flipping the latter two. 50% on needs, 30% on savings, and 20% on wants. If your employer supports direct deposit, allocate 70% of your paycheck to your checking and 30% directly to your savings account. This way, you make sure that you will always have money saved up each month. 

3. Make sure to pay off your credit card in full each month

Credit cards have one of the highest interest rates, an average of 21%. If you owe $100 and did not make your payment on time, you will get charged $21 interest on top of $100. And this accumulates fast. If you miss another payment, you will get charged $25.41 on top of the $121 that was owed last month. This is why many people couldn’t get out of debt because it’s a snowball effect and it just keeps growing bigger. So, make your payments on time every month and only spend what you can afford to pay off in full each month.


Getting a college degree opens up many more possibilities for your career. Although going to college is expensive but there are many ways you can manage to pay for college and graduate without any debt. Never take out a loan, ask your parents for a loan instead if it comes down to that. They may not charge interest or as high of interest compared to normal loans. 

If you follow everything that I’ve laid out here, you too can graduate debt-free and have some savings by the time you graduate college. 

What worked for you to prepare, save and pay for college? Share your tips below!


How much does a community college cost?

The average tuition cost is around $5,000 while the cost of attendance (including tuition and fees, room and board, books, and supplies) is about $7,000, varying by location. Check your local community college.

How much does a 4-year university cost? 

The average tuition cost is around $ 12,000 (my experience in Oregon) and the cost of attendance for a four-year institution is about $25,000. 

How much money should I save for college?

Depending on whether you’re starting with a community college or a four-year institution. You may want to save enough for at least 2 terms of tuition plus other expenses such as rent, food, transportation, and so on. For community colleges, the average cost of attendance is about $7,000 while the four-year institutions are about $25,000. 

Is community college worth it?

For someone who has attended both community college and a four-year university, I would say it is totally worth it – experience and financial-wise. It saved me so much money and was the contributing factor that allowed me to graduate with over $14,000 in my bank account. In community college, you get to meet new people who may be already working, and in a four-year institution, most people are full-time students. You get to experience two very different environments which widens your perspective. 

Is it possible to graduate without debt?

Absolutely! Though it requires hard work and discipline. Apply 3 principles: maximize income, minimize expense, and optimize money. Here are some major things you can do: 

Disclaimer: The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Everyone has a unique situation and what I wrote applies only to mine. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information on the site before making any decisions.

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