I debated writing about my finances during undergrad. While I was writing how I avoided student loans and graduated with my MBA I recognized it was important to disclose my undergrad experience. Without a doubt, I was very fortunate graduating without student loans. In addition to graduating without student loans, the repetition of hard work, saving and investing at an early age laid the right foundation for success as I entered my 20s.
Deciding On My Undergrad School
I attended a private school in the Boston area and majored in business. My first choice for undergrad didn’t offer me any scholarships and my second choice did. Even though my parents had offered to pay for college regardless of where I decided to go, it didn’t feel right to pick the more expensive school. The education I’d receive from both schools was very comparable. I decided to go with my second choice. Luckily, it turned out that this was absolutely the right choice in every way.
Reducing Undergrad Tuition and Expenses
Leverage AP Classes in High School
In high school, I took enough AP classes in high school to graduate a semester early. Instead of graduating a semester early I took 4 classes a few semesters so that I could have a 16 hour / week internship and go part-time my last semester. This was a critical first step. Many entry level jobs require previous experience. Without having the flexibility to take 4 classes instead of 5 it would have been much harder for me to balance my internship with classes and extracurricular activities. Other classmates did this too, but took summer and winter classes to make up for this. This then increased their tuition costs whereas my decision decreased the amount I was able to save on tuition.
I was offered a merit scholarship that covered 1/3 of tuition from the school. And, as a result of this generosity, I continue to donate to my college today and earmark my donations to fund scholarships to pay it forward. My high school also had a list of all scholarships you could apply to sponsored by local businesses. A local bank awarded me a $5,000 scholarship which covered my books and other fees. AP classes ended up saving the cost of 2 courses but could have saved a full semester.
Who Paid For My College and Living Expenses
Merit scholarships and AP class credit ended up saving around $50,000. Without a doubt, the remainder was still expensive. I am fortunate that the rest of tuition, housing during the school year and the meal plan was paid for by my family.
A bit of background on my family. I grew up in a middle class family. They prioritized education and forwent luxuries so I wouldn’t have to pay for college. In part, they were also able to do this because I had no living grandparents by the time I was a junior in college.
I had to pay for housing every summer after my sophomore year and any bills / luxuries not mentioned above. Certainly, this is much more manageable than paying for all of college. But, these expenses still need to be paid for somehow. If I didn’t work, I would have had to take out loans or go into credit card debt.
The bank of mom and dad may have been willing to give me loans at 0% interest upon careful inspection of every single purchase if I ended up in a desperate situation. However, I valued my freedom and desire to spend my money how I wanted too much to ever go down this path. It was nice to go on spring break because I had the money to do so. I had other friends in college that weren’t able to because they didn’t work and when they asked their parent for money their parents said no.
Working During School
Since I was 16 I worked 40+ hours over the summers and college was no different. My last summer I had 2 internships, worked during winter break and I worked 16 hours a week for 5 semesters. I also worked during the school year in high school.
In total, I worked about 3,600 hours before starting a full time job at 21. The minimum amount I ever made was $8.50/hour and max was either $12 or $13/ hour. This means at minimum I made $31,000 pre-tax during this time. My biggest expenses during this time was housing two summers, car insurance, sorority dues and my cell phone bill. After that, I didn’t splurge and saved as much as I could. I also started investing my hard earned money. Since it was the middle of the financial crisis I was able to do things like buy $1,000 of $APPL and sell it a few years later for $3,000.
Saving was easiest when I was working full time during the summer in high school and most of my friends either weren’t working or were only working a few days a week. I missed a lot of beach days; however, it was worth it. When your only bills are car insurance and the $10 portion of the family cell phone plan it’s easy to save money. Add in your friends making less since they worked less and it’s easy to avoid “lifestyle inflation.”
How I Avoided Credit Card Debt
It would have been very easy during this time to go into credit card debt. I could have easily spent all of my money going out in Boston or shopping. Instead, I set a budget and stuck to it. I surrounded myself with friends that were reasonable with money too. Our financial situations ranged but this made it easier to not spend the money I was earning. We would borrow each others clothes, have house parties, go to Starbucks instead of a dinner, do activities that were free. I certainly never felt like I was missing out during this time. I also didn’t have to work as many hours as I did, but I naturally am a saver and wanted more money in my bank account.
By living with roommates I minimized my summer housing expenses as much as I could. Of all of my expenses during college, this was my biggest expense. The summer my friend and I sublet a room we shared the room for $400/ month or $200 each. I remember being so stressed about paying this when I agreed to sublet. It’s funny how cheap this is reflecting back on it.
Everyone comes from different situations and some situations are more favorable than others. But, we all have a choice in how we respond to the situation we’re in. You can have college paid for and still go into credit card debt because you’re irresponsible with your spending. You can have no college paid for and apply for scholarships, live at home, go to a public university, graduate early and work during school to minimize the amount of loans you have to take out.
Getting a Job
In the Fall of 2009 job opportunities looked bleak. We were in the middle of the financial crisis and it was unclear which direction the economy would be heading. I had no idea what I wanted to do, but knew our career services team quite well. They suggested I apply to a few leadership development programs. One company clearly wasn’t a fit. The other company, a technology company, was. The recruiter that interviewed me was in my sorority but at another school and we bonded immediately. I was offered the job and took it without hesitation.
After I graduated I started working full time as a business analyst at a tech company and started saving 40% of my paycheck after tax within 6 months of working. My savings have always been automated, so it’s never money I missed. Especially when you go from working only 16 hours a week to a salary job, never seeing how much money I really made ever is one of the best financial decisions I’ve made.
College Hacking Resources
To learn about ways on how to hack college and avoid student loans for undergrad, check out The Ultimate College Hacking Guide by A Dime Saved.