When to go and when to book
Being in the southern hemisphere, the Australian summer falls between December and February. Needless to say, this happens to be the time when most tourists visit Melbourne, making everything rather expensive. Strictly speaking in terms of the weather, the best times to visit the city would be in the fall (March-May) or spring (September-November). Being a world-class city that it is, Melbourne has a lot of festivals and events charted throughout the course of the year, so any time is a good time to be here, if weather is not a consideration.
As far as booking plane tickets is concerned, the as-early-as-possible rule applies to Australia as well. The earlier you book, the better your chances are at nailing an affordable ticket. And if you happen to be flying from the US, it is better to pick a departure point on the west coast.
Choose your accommodation wisely
A bustling metropolis, Melbourne gives you plentiful accommodation options to choose from. While chain hotels are right up there for those looking to seek luxury, budget travelers can explore the rather hip option of housesitting, especially if you're planning a stay that extends to a couple of weeks or more. Couchsurfing and AirBnB are two godsend sites that will show you the way.
Nomads Melbourne | 198 A'Beckett St, Melbourne VIC 3000 is a great place in the city center that offers digs for as low as USD 30 a night, and they also have packages that let you combine adventure activities along with the stay.
If you're traveling with family, or are a part of a large group, it would be prudent to rent an apartment. By doing so, your accommodation expense gets contained to a great degree, if you compare that to staying in a hotel. Affordable apartments can be found all over the city, so you can pick an area to stay, depending upon the activities you plan to indulge in. Plus, most apartments come with a fully-equipped kitchen, which means that you can cook a few meals at home, thus saving a few extra bucks. Which gets us to our next bit of advice...
Choose the cheap eats
Melbourne's cultural fusion cooks up a heady concoction for the palate. From authentic European to rustic Thai, to Greek goodness, the city's eating options are as varied as its multicultural inhabitants. If you're living in a rented apartment or are housesitting, the best option would be purchase fresh ingredients from the local markets, and whip up a filling-yet-cheap meal on your own. But yes, with all the money that you'll be saving, do make it a point to eat out occasionally to experience the local food. You may decide to go low-cost with fish 'n' chips at a road stall, or go all out at Longrain or Cutler&Co.
Internal transportation is a breeze
Melbourne's internal transportation system does not disappoint on any grounds. You have trains, buses, trams, bicycles, and even dedicated walkways that make this city the easiest to navigate. In fact, Melbourne's tram network is supposedly the largest in the world. The City Circle tram is a free service aimed at tourists, which runs around central Melbourne's biggest attractions. Cycling is also pretty popular, with rentals notching up high numbers among locals as well as tourists. When you are in Melbourne, you may choose to buy the myki Visitor Pack, which will let you travel on trams, buses, and trains within Melbourne. If you are planning to spend your entire holiday in the city, renting a car just does not make sense when you have such a stellar public transport system in place.
Explore like a pro
Sightseeing in Melbourne need not weight heavy on your pocket, as the city proudly displays its quirky character in its alleys, hidden shops, art galleries, and indie theaters. The lanes of Melbourne are alive with street art, and the best way to explore it would be to take a walking tour.
Another quirky way of taking a dekko around the city would be to get on a vintage Victorian horse-drawn carriage. Now, this may not come cheap, but is a great way to see the city, especially for couples.
Melbourne's sports tours are a must for all sports enthusiasts. There are plenty of famous venues in the city, such as the MCG, 2006 Commonwealth Games Village, Albert Part, Flemington Raceway, Rod Laver Arena, National Sports Museum, and many more.
The Queen Victoria Market is a great place to have a meet-and-greet with the locals, and laying your hands on some fresh produce for your kitchen. You can also sample street side cuisine here, and enjoy a hearty breakfast for less. The market is located on the corner of Elizabeth and Victoria Streets, operating in the mornings on all days, barring Mondays and Wednesdays.
Australia's remote location, combined with a strong currency means that a vacation here won't exactly be cheap. But there are a few budget ideas that ought to help you cover it, and also have the time of your life while you're there. Hope your planning efforts result into a fabulous holiday in Oz.