There is no dearth of places to stay in Varanasi. From cheap hostels to multi star hotels, there is something for everyone. I prefer the hostels, with Zostel being a favourite. Stay as close to the ghats as your budget allows.
How to get there
Varanasi has a couple of railway stations, but the number of trains which stop there are limited. The best way to get to varanasi via train is to get to Mughal Sarai (MGS). MGS functions as a node for important train corridors and is well connected to all parts of the country. Bus routes are available from all major cities and towns around. There is also the Lal Bahadur Shashtri Airport (VNS) which has regular flights operated by Indigo, Air India, Jet Airways, Thai Airways, just to name a few.
A word of caution to all the travellers in India, unless you are accustomed to the place, kindly carry your own water bottle and water, or buy sealed water bottles only. Do not drink water out of the tap. Street food is safe, if you see it being freshly prepared, and a large crowd is consuming it. Carry mosquito repellants, and flashlights.
Good luck and cheers!