How to budget for your final year of school, first as new practitioner

Timothy Ulbrich, PharmD, is a cofounder and CEO of Your Financial Pharmacist (YFP). Founded in 2015, YFP is on a mission to help pharmacists achieve financial freedom through fee-only, virtual comprehensive financial planning services, and various free resources.

Making the leap from student to new practitioner is exciting—and expensive. The transition can feel like a financial whirlwind, where one-time expenses hit and income is unpredictable, creating a perfect storm of financial stress. But there’s good news: With proper planning, you can ease the burden and set yourself up for financial success.

Let’s break down those looming costs and discuss how to prepare for them.

Expenses during your final year
The final year of pharmacy school is notoriously expensive. Here are some key areas to keep in mind.

1. APPE rotation costs: As a final-year PharmD candidate, the cost associated with APPE rotations can add up. While out-of-area rotations will inevitably yield greater expenses, even local rotations can add transportation costs, put additional wear and tear on a vehicle, and yield higher food expenses than normal. These higher expenses are often compounded by increases in tuition and fees in the final year and less income from paid internships due to limited flexibility of schedule.

2. Residency/fellowship applications: If you’re pursuing a residency or fellowship, the associated fees can be a significant expense. This includes application fees, interview travel costs, attending showcases, and buying new attire, to name a few. In 2025, the ASHP PhORCAS application costs are $110 for the first four applications and $43 for each additional application. This is on top of a $160 fee for the National Matching Service.

3. Licensure costs: This is one of the biggest expenses you’ll face. You will have NAPLEX and MPJE exams, score transfer fees, prep courses, and, in some cases, state-specific licensure fees. In sum, these licensure-related costs can easily surpass $1,000.

Expenses after graduation

Once you walk across that stage, the “real-world” costs hit full force. While student loans tend to be the largest expense graduates face, there are other one-time costs that need your attention and planning.

1. Graduation celebration: Let's be honest—you’re going to want to celebrate. Whether it’s a dinner with family, a party with friends, or a trip to unwind, a graduation celebration is likely in your future. Make sure to budget for it as part of your transition costs.

2. Car purchase: While not an immediate necessity for everyone, it’s common for new graduates to want to buy a car after graduation. Not all car purchases are created equal, and it’s a common trap for new practitioners to splurge on a brand-new car, all the while a used car would have done the job and allowed for more money in the budget to put toward other goals.

3. Milestone events: Life milestone events often coincide with career milestones. If you’re planning a wedding or honeymoon, the associated costs need to be considered well in advance of the festivities. Furthermore, it’s common for there to be a desire to purchase a home, which will require a down payment, closing costs, initial furnishings for the home, and moving expenses.

Planning for big expenses

So, how do you manage these expenses without falling into a financial pit? While there’s no one-size-fits-all solution, I recommend starting with a zero-based budgeting approach to stay on top of your finances.

You can download the YFP zero-based budget template for free at http://yourfinancialpharmacist.com/budget. Here are the five steps to start your zero-based budget:

Step 1: Determine your take-home pay
Your take-home pay is the amount of money you receive after taxes, insurance premiums, retirement contributions, and other deductions have been made. For students, your take-home pay may include loan disbursements and any part-time work income. While take-home pay can be difficult to calculate while in school (since income is variable), it’s important to build this muscle which will be useful when your income stabilizes.

Step 2: Account for necessary expenses
Necessary expenses are your non-negotiables. These include things like rent payments, transportation costs, food (but not eating out), utilities, insurance premiums, and minimum debt payments (e.g., credit cards).

Step 3: Determine how much to spend on discretionary expenses
Discretionary expenses are “nice-to-haves.” These include dining out, entertainment, clothing (beyond the minimum), and extra payments on debt. These expenses are more flexible and can be adjusted if needed.

Step 4: Calculate your disposable income

Once you’ve accounted for necessary and discretionary expenses, subtract them from your take-home pay. The remainder is your disposable income, the money you have left to allocate toward other financial goals.

Step 5: Allocate disposable income to your goals
This is where zero-based budgeting shines. Allocate your disposable income to your financial goals—whether that’s saving for a graduation trip, down payment on a home, funding an emergency fund, or saving for a car purchase. If your disposable income isn’t enough to meet your goals, revisit your discretionary expenses and see if there are areas where you can cut back.

Start early, stay disciplined
Financial discipline starts during school, so don’t wait until after graduation to think about budgeting. Starting early gives you time to develop good habits and prepare for the financial demands during this exciting transition. With the right planning, you’ll be ready to navigate the expenses of your final year of pharmacy school and your transition to a new practitioner with confidence.

If you’re looking for budgeting tools, in addition to a good ‘ole Excel spreadsheet, check out YNAB, EveryDollar, or Empower—all of which can help you stay on track. And remember, while planning for these expenses might feel overwhelming at times, with a solid plan in place, you’ll be able to manage your finances with ease and head into your new career on a strong financial footing.

For more financial tips, resources, and information, check out YFP’s book Seven Figure Pharmacist, visit the YFP website, and listen to the YFP podcast.

Disclaimer: The information in this article is provided to you for your informational purposes only and is not intended to provide, and should not be relied on for, investment or any other advice. Read our full disclaimer here