Ok so I have just started using a laptop for my class and I wanted to ask you guys before I searched everywhere for my answer, is it possible for me to not only create an image but also save it to an external hard drive using usb? I am wanting to make a restore image for my laptop and it does not have room for another drive inside I do not think, nor do I have a second laptop drive I could use anyway. 

Creating a System Image Backup and backing up data to another drive, DVDs or network share is a good idea in case your current drive fails. Windows 7 and 8 include this functionality out of the box.
 
Windows 7
http://windows.microsoft.com/en-us/windows7/products/features/backup-and-restore
http://windows.microsoft....puter#tab=system 
 
Windows 8 http://windows.microsoft.com/en-us/windows-8/what-happened-to-backup-restore
 

You can use System Image Backup like you did in previous verison of Windows.
To open System Image Backup

Swipe in from the right edge of the screen, and then tap Search.
(If you're using a mouse, point to the lower-right corner of the screen, move the mouse pointer up, and then click Search.)
Enter File History in the search box, tap or click File History, and then click System Image Backup.