Australia is an expensive destination to visit, regardless of the drop in value of the Aussie dollar, and the capital of its southern state Victoria is no exception, but it is still possible to do Melbourne on a budget and here’s how.

From taking advantage of free public transport to checking into longer-stay apartments, here are our tips to experiencing Melbourne on a budget.

Melbourne on a Budget – How to Experience Melbourne More Affordably

Getting to Melbourne on a Budget

Skip an expensive taxi and take the SkyBus from Melbourne Airport to Southern Cross Station in the city. It runs 24 hours, takes 20 minutes, leaves every 10-15 minutes, and costs $16/$26 one way/return per person and $36/56 for a family (2 adults and 1-4 kids). For travellers on a tight budget who aren’t deterred by a 60-minute trip to the city, there’s also a public bus; see Melbourne travel writer Tim Richards detailed blog post on that option here.

Getting around Melbourne on a Budget

Melbourne’s taxis are expensive, trams and buses aren’t cheap, and there are no dedicated tourist travel passes/reduced multi-day tickets/ticket bundles (although a ‘MYKI visitor pass pack‘ is in the works, which you should look out for). The good news is you can travel around the city centre, or CBD (central business district) as Aussies call it, on a free City Circle Tram or Tourist Shuttle Bus.

The City Circle Tram runs around the CBD perimeter every 12 minutes, seven days a week, while the Tourist Shuttle runs every 30 minutes and covers a larger area, taking in Carlton, Docklands, Southbank, the Royal Botanic Gardens and Jolimont. The bad news is the City Circle Tram only runs from 10am-6pm Sunday to Wednesday and 10am-9pm Thursday, Friday and Saturday, while the Tourist Shuttle runs from 9.30am until just 4.30pm each day.

Update as at October 2015: since early January 2015, all trams in the Melbourne CBD are free, so if you’re focusing your exploration on the city centre you’ll save money by using trams to get around.

Settling in to Melbourne on a Budget

You’ll save money by staying in an apartment instead of a hotel, as much as we love some of Melbourne’s beautiful hotels. We tried a handful of the city’s superb serviced apartments, of which Punt Hill, Citadines, and Espresso Apartments are the best value – they’re more affordable than hotels with the advantage of having kitchens and laundries, while two or three bedroom apartments can be split between couples, friends or family.

Shop the markets in Melbourne

One of the reasons we love staying in apartments is because we can fill our fridge with fantastic produce from the local markets and do some cooking, so we’re not eating out for every meal. Melbourne has some phenomenal fresh food markets, including Queen Victoria Market, South Melbourne Market and Prahran Market, which we review in this post.

Snacks and picnic supplies in Melbourne

Melbourne’s markets are also a great place to pick up fresh bread, dips, cheeses, olives, cold meats, and fruit, which are ideal for snacks or picnics. Budget-priced fast food treats that locals love include the Turkish-inspired boreks at Queen Victoria Market, dims sims at South Melbourne Market, and Vietnamese spring rolls at Prahran market. We like to pick up a dozen freshly shucked oysters at one of the market seafood shops (for up to a third of the price you’d pay at a restaurant!) and a bottle of wine from Sword’s Wines, and head to South Bank or St Kilda Beach. Sublime.

Shop vintage in Melbourne

Can’t afford Melbourne’s fabulous fashion? Then opt for more affordable and more interesting – not to mention uniquely Australian – vintage fashion. You can also find some very special souvenirs, such as retro Australiana (including kitsch 1950s ceramic kangaroos) at vintage stores like The Junk Company. See our full guide to vintage shopping in Melbourne.

Explore Melbourne’s lanes and arcades

Is the city’s famous Hidden Secrets Lanes and Arcades tour a bit beyond your budget? As brilliant as it is to do the tour with a knowledgeable local guide, there’s nothing stopping you from exploring on your own and you can entertain yourself for days ambling the elegant arcades and alleys, taking in the architecture and street art.

Eat affordably in Melbourne

Melbourne boasts some of the world’s best restaurants (don’t believe us? See this tasty little time-lapse) but unfortunately dinner at them is out of reach for travellers on a budget. Go for lunch instead. Restaurants such as Spice Temple offer affordable Yum Cha for lunch, at Movida you opt for the tapas instead of the more expensive mains, while Bistro Guillaume has two courses of French classics for $45. Melbourne also has plenty of cheap eats in its multicultural neighbourhoods such as Richmond, where its main drag Victoria Street is lined with Vietnamese restaurants like Pho Chu The and I Love Pho, where you can get a bowl of pho soup for less than $10. In South Yarra, Dainty Sichuan has deliciously fiery dishes for less than $10 for lunch, but three times that price for dinner.

Get off the beaten track in Melbourne

Multicultural suburbs like Dandenong, Melbourne’s ‘Little India’, are not only fascinating places to explore (read about our visit on the Masala Trail tour), they boast plenty of budget eateries, such as Chandni Chowk, where curries cost less than $10 and their tasty chaat costs $6.50.

Do a coffee tasting in Melbourne

Melbourne prides itself on its coffee, so if you’re a coffee lover you should get along to a free coffee cupping at one of Melbourne’s excellent cafés. Read about our experience cupping coffee at Market Lane café.

Kick back at Melbourne’s beaches and parks

Melbourne may not have the breathtaking beaches and harbourside parks of Sydney, but it does have some very pleasant parks and green spaces, such as the Royal Botanic Gardens, Fitzroy Gardens and Albert Park, while the slim stretch of sand that extends from Port Melbourne Beach to St Kilda Beach is perfect for a stroll or simply savouring the sunset.

Tuck into a pub counter meal in Melbourne

While blackboards outside Melbourne’s pubs advertise ‘Parma and Pot’ specials, you can get more delicious and better quality counter meals at pubs such as the Middle Park Hotel, where hearty old-fashioned dishes like Irish Stew, Coq au Vin, and Pork Cordon Bleu go for $12 during lunch and dinner.

Let Melbourne entertain you

Cheap happy hour drinks, art exhibition openings, free comedy nights, cheap music gigs, and cut-price theatre tickets can ensure you’re entertained after dark. Check Time Out Melbourne to see what’s on when you’re in town.

Getting away from Melbourne on a Budget

For affordable onward travel, trains to other state capitals are a good option if you haven’t seen much of the country, although they’re expensive by foreign standards. Flying will cost around the same price and is obviously considerably faster. For interstate train travel see VLine and for domestic flights Australia try Flight Centre, which has a policy to match other prices. A tip: buy your train tickets at a station; though you can purchase online, they will want to post your tickets to a mail box! Bon Voyage!

Do you have any tips for experiencing Melbourne on a budget? Feel free to leave them in the comments below.

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