• Kavya Ravikanti

How to Graduate College Debt-Free - Muhammad Hussain

This week we have Muhammad Hussain, who shares his story of graduating college without taking out a single loan. Muhammad is the king of taking advantage of his job's benefits and also loves the envelope method of budgeting.


Occupation: Technical Architect

Age: 23

Salary Range: $80,000 - 100,000

Location: Dallas, Texas

Student Loans/Debts: N/A

Monthly Expenses: $450 - Subscriptions, Gas, Utilities, Gym Membership, Car Insurance * currently living at home 🙂


Kavya: Tell me a little bit about yourself? Where did you go to college and when did you graduate?

Muhammad: I started off at Bellevue College, a local community college in the Seattle area. After getting my Associate's degree there, I transferred to the University of Washington to get my Bachelor's degree in Informatics and graduated in 2019.

Kavya: Take me back to the time you first thought about personal finances for yourself?

Muhammad: I was 20 years old and had just gotten a job working at the Microsoft store while in college. Once I got my first paycheck, my dad kept asking me about opening up a 401(k) since Microsoft has a really good retirement program for retail employees as well. Despite saying I would do it, 3 months later, I still hadn’t opened one up since I had no idea what a 401(k) was.

So my dad sat me down and pulled up a retirement calculator to show me how much I had missed out on by doing nothing for just 3 months. My reaction was "Oh my god, I need to start focusing on this!" and since then I've been aggressively investing and saving for retirement.

Kavya: Where did you go from there? What were some of the other early steps you took with your money?

Muhammad: I made sure I took advantage of the financial benefits my jobs offered me. I opened up a 401(k) at Microsoft and later when I started working at the Apple store, I opened up a 401(k) with them as well. I also enrolled in the Apple Employee Stock Purchase Program (ESPP). Not doing this at Microsoft was a big regret since the stock at the time was around $35 and now it's over $200. I also opened up a Roth IRA and invested in that aggressively to max it out each year.

Kavya: From watching your YouTube video, I learned that you paid for college yourself and didn't take any student loans out. That’s incredibly impressive - talk me through your thought process here and how you accomplished it!

Muhammad: Two things that made this possible initially: my dad paying for my first year of college and attending a community college. It's super affordable - each quarter is only $1500 and you can do a payment plan (3 payments of $500) as well.

After my first year, I got a part-time job on campus and once I started making money, my dad told me I had to pay for college as well. This pushed me to do everything I could to pay for each quarter. I applied for a ton of scholarships and filled out the FAFSA. Unfortunately, I didn't get any scholarships and I didn't qualify for any FAFSA loans. I am Muslim and one of our beliefs is to not pay interest so I also avoided debt relentlessly for this reason.

My main goal became to be on top of the payment plan while going to community college. Living at home also made this easier, as my only expenses were tuition, and my bus pass to get to school.

Kavya: Some people are worried about missing out on the college experience when going to community college, how did you think about the trade-off?

Muhammad: I did worry about this during my freshman year but after realizing how big the community college I went to was, I stopped worrying. Bellevue College, in total, has around 10-15K students and if you include hybrid and online students, there's a total of 30K students.

There was also a good connection between Bellevue College and UW. A lot of the student orgs and clubs I was a part of would work closely with their counterpart at UW. However, if I have to be totally honest, the college experience was a lot better at UW.

My main focus was to save as much money as I could and not fall into student debt, so I was okay with making the sacrifice of not getting a typical college experience for my first two years.

Kavya: When you transferred, how did you have to reconfigure your finances as UW would be more expensive?

Muhammad: UW was definitely more expensive but it's actually cheaper than a lot of other in-state schools. Tuition was roughly $12,000 per year.

When I got into UW I had to pay for my first quarter's tuition and unfortunately, I didn't have much saved up. For every paycheck I received, I would take all my money and put it away into savings and live off of $100-200 a month. Again, I was able to do that as I was living at home.

Microsoft and Apple also had a tuition reimbursement program. So I paid my fall quarter tuition out of pocket and then the companies would reimburse me. Per year they’d cover $5,250 which is standard for most companies that do tuition reimbursement programs.

During the summers, when I was doing my internships, I would also save up all of my paychecks to help pay for the next year of school.

Kavya: Were you working at both Apple and Microsoft stores throughout college?

Muhammad: I worked at the Microsoft store in my sophomore year and then my junior year I switched to the Apple store. During my senior year, I worked on campus at UW.

Kavya: How did you balance the tradeoffs between graduating debt-free and the sacrifices you had to make for it to be possible?

Muhammad: The goal of graduating debt-free is what drove me and made the sacrifices easier to make. There were definitely times where I would want to go out and eat. I would balance going out to eat with finding free food on campus and having my friends join me there.

I was so willing to make these sacrifices that I stayed two additional quarters. I was supposed to graduate in the Spring of 2018 but I had left my job at the Apple store and my hours were reduced at my on-campus job so I could only afford to pay for one class per quarter. I didn't want to take additional classes since I'd have to take a loan out for that.

Kavya: What are some other jobs you've come across that offer great benefits for college students?

Muhammad: Check out a website like Glassdoor or Blind to understand a company's benefits if your goal is to find a high paying job with benefits that also takes students. This is what drove me to get a job at Microsoft and Apple stores.

I would recommend looking into UPS. They have a really amazing program for college students. You could work part-time in the warehouse loading up the trucks and receive great pay, get your tuition covered, and be part of a labor union. It's a pretty sweet deal when you are a college student.

Kavya: Shifting gears to post-grad, how did the transition from college to working a full-time job go for you? What changed on the financial side of things?

Muhammad: Right after college, I got a job at Amazon. It was definitely intimidating going from college life to corporate life but having my internship experience was a huge help.

During my internships and my part-time jobs at the Apple and Microsoft stores, I couldn't take advantage of all the financial benefits and perks the companies offered. As a full-time employee, I had more benefits available to me but I didn't know how to navigate them. Unfortunately, there isn't someone there to hold your hand and help you find all the information you need. Work was also an intensive environment so it took me a while to figure out how everything worked.

I ended up moving over to Salesforce, which is where I work now, and they are a lot more transparent about how everything works and it was a lot easier to navigate. There were events where people would come speak to us about retirement and other financial knowledge we needed to know which was also helpful.

Kavya: What does your financial system look like today? Do you budget or track your spending?

Muhammad: I have a spreadsheet where I track my budget. I get paid every other week, so I take what my biweekly paycheck would look like, after taxes, 401(k) contributions, and employee stock purchases. This essentially amounts to half my paycheck after all those are accounted for.

Muhammad's Spreadsheet

Then, I take my major fixed expenses out of the remaining paycheck amount, and from whatever is left, 50% goes towards personal investing, and then the rest I keep on me.

In the beginning, I would pay for everything using my credit card or debit card and I found that my money was being spent really quickly that way. So, I started adopting the envelope method with physical cash.

I now use cash to spend for anything that is fun spending and the psychology of seeing your money physically leaving you has really helped lower my spending. I only use my credit cards for subscriptions such as Netflix, Hulu, and the gym.

Kavya: What do you invest in and what's your investing approach?

Muhammad: I have mostly been investing in traditional assets such as stocks and ETFs. I've also invested in non-traditional assets such as crypto and precious metals. It's pretty unorthodox for people our age, but I view it as insurance that if anything happens to the dollar, I don’t lose my entire net worth. I've also made a pretty decent return on gold and silver.

Kavya: How has your relationship with money changed from college to today?

Muhammad: Now I'm a lot more cautious about my money since I have a lot more of it. However, in college it was more survival mode in that I just needed the bare minimum to not go into student debt.

My focus has shifted to growing my money through my investments. In college, I spent my leftover money on stupid things and I had no idea what stocks and ETFs are. I regret not investing my money in stocks such as the Tesla stock back in 2016.

Kavya: What are maybe some mistakes you've made with managing your own money and what would you suggest people avoid?

Muhammad: The biggest mistake for me was using one debit card and not using the envelope system earlier. When I was just using my debit card, I also wasn't monitoring my spending and I had left all my money in my main checking account. Now, I have my money in multiple places and I limit the amount I'm spending.

Kavya: What financial decisions are you currently considering for the future?

Muhammad: I'm definitely thinking about investing in real estate. I'm supposed to be in Dallas right now, but because of COVID, I'm at home with my family. The real estate in Dallas, Texas is quite affordable so the next big financial decision I'm hoping to make is to buy some real estate over in Texas.

Kavya: If you could give one piece of actionable advice for college students or anybody starting out on their personal finance journey today, what would it be?

Muhammad: Make a budget and track your money. My first job was at Menchies (frozen yogurt place) and I remember getting my first paycheck for $200 and spending it all in one weekend and not knowing where it went. Keeping track of your money is crucial, especially when you're young.

Kavya: People are often scared of making the wrong decision when it comes to their money? What is your response to that?

Muhammad: Just take the risk. When you're young, you have so much time left in your life that you'll recover from any risks that you take that don't go well.

You're going to lose money when you invest. When you're putting money into a 401(k), it's not always going to go up. I saw a huge dip in my account when COVID hit, but they are bouncing back.

You also learn from all of the risks you take, so view it as a learning opportunity.

Rapid Fire

What credit cards do you own and why did you get those ones?

Chase Sapphire Preferred

  • 80K bonus points if you spend $4,000 in the first 90 days

Secured Credit Card from my local credit union

  • Only one I could get and if you do go over your limit, it comes out of the money you've deposited which is really nice.

Alaska Airline Credit Card

  • I regret getting this credit card because I barely use it.

Apple Credit Card

  • I am a huge fan of Apple but I only use it for Apple storage and any Apple upgrades I get.

Amazon Prime Rewards Visa Card

  • 5% cashback on Amazon purchases and at Whole Foods if you are a Prime member.

How much of your income do you save annually? Can you break it down amongst like different financial vehicles?

The system I am working towards* is putting away 50% of my money for essential spending (ex. rent). 10% towards investments, 10% towards eating out/entertainment, and 30% towards savings.

*currently, it's different as he is living at home

What like tools, apps, or services do you use to manage your money?

Google Sheets for my budgeting. I also use Mint and TrueBill.

401(k), ESPP - Fidelity.

Individual Investing - Robinhood

Checking Accounts - Local Credit Unions (don't have ridiculous fees and penalties)

Savings Accounts - All America Bank and Yotta Savings

Any resources you would recommend?

Minority Mindset, Graham Stephan, and Andre Jikh on YouTube

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Most personal finance blogs only share stories of the people who have it all under control, save 50% of their income, and retire early. While that is impressive, some of us want a career and some of us just need our oat-milk matcha latte every morning. However, we all still face the same woes when it comes to managing our personal finances. MoneyStories is a series of interviews with young professionals and recent graduates sharing their stories on how they have and are navigating their personal finances.

Disclaimer: Views, thoughts, and opinions expressed in the text belong solely to the interviewee, not the author, and not necessarily to the author’s employer, organization, committee, or any other group or individual.

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