Peru on a Shoestring: Budget Travel from Cusco to Lake Titicaca's Island Homestays

Cusco sits at a breath-stealing 11,152 feet, and I mean that literally – expect to spend your first day moving in slow motion as your body adjusts to the altitude. I learned this lesson the hard way when I attempted to sprint up the San Blas neighborhood stairs on day one (rookie mistake, elevation level: expert).

The beauty of Cusco for budget travelers is that it's designed for lingering. While many tourists use it merely as a Machu Picchu launching pad, I spent four full days here without once feeling bored or broke. The city center itself is an open-air museum where you can wander for days among Incan walls, colonial architecture, and vibrant markets without spending a sol.

For accommodations, skip the touristy spots near Plaza de Armas and head to the San Blas neighborhood, where hostels like Kokopelli offer dorm beds for $12-15 per night. I stayed at Sunset House Hostel, which at $14/night included a simple breakfast and, more importantly, panoramic views that rivaled any I've designed in my games.

Food-wise, the San Pedro Market became my daily refueling station. For 10-15 soles ($3-5), you can feast on a complete lunch at the market's food stalls – just look for where the locals are eating. My go-to became the second stall from the east entrance, where a woman named Carmen serves the best lomo saltado in town for just 12 soles.

For capturing Cusco's magic, I relied on my travel tripod for those stunning blue hour shots of illuminated colonial buildings against the deep indigo sky. At only 2.9 pounds, it barely registered in my daypack but made all the difference for low-light photography.

The Sacred Valley is where budget travelers face their greatest challenge: experiencing incredible Incan sites without emptying their wallets. While organized tours run $50-100 per day, I discovered you can DIY the entire valley for about a third of that price.

My strategy? Base yourself in Ollantaytambo rather than returning to Cusco each night. This charming town has plenty of budget accommodations (I paid $18/night at Hostal El Tambo, including breakfast) and sits strategically between major sites. Plus, Ollantaytambo itself is home to impressive ruins that you can explore during the quiet early morning or evening hours when day-trippers are absent.

From Ollantaytambo, catch collectivos to Urubamba (3 soles), then transfer to reach sites like Moray and the Maras salt mines. For Pisac, take an early morning collectivo directly from Cusco before heading to Ollantaytambo later that day. This transportation method saved me nearly $40 compared to organized tours.

Food costs plummet outside Cusco too. In Ollantaytambo, follow locals to small family restaurants where 'menu del día' runs 10-15 soles ($3-5) for soup, a main dish, and a drink. I discovered an unmarked spot three doors down from the main square where a grandmother serves home-cooked quinoa soup and trucha frita (fried trout) that rivaled any restaurant meal I've had.

For hiking the numerous trails around the valley, my hiking daypack proved indispensable. Its compact design still managed to fit my camera gear, water reservoir, snacks, and an extra layer for when mountain temperatures dropped unexpectedly. The breathable back panel was particularly appreciated during steep climbs to viewpoints above the ancient terraces.

Let's address the alpaca in the room: Machu Picchu isn't cheap. But with some strategic planning, you can slash costs significantly while actually enhancing your experience.

First, forget the overpriced train packages. Instead, I took the 'backdoor' route: collectivo from Cusco to Santa Maria (20 soles), another to Santa Teresa (15 soles), and a final one to Hidroeléctrica (10 soles). From there, it's a scenic 2.5-hour walk along the railroad tracks to Aguas Calientes (Machu Picchu town). This transportation method saved me over $140 round-trip compared to the train.

In Aguas Calientes, bypass the tourist-oriented restaurants and head uphill to where locals eat. I found a tiny place called 'Doña Julia's' where a filling dinner cost just 15 soles instead of the 45+ soles near the main square.

For Machu Picchu itself, I purchased my entrance ticket online 30 days in advance (the earliest possible) to secure the 6am entry time – crucial for both photography and avoiding crowds. Rather than taking the $12 shuttle bus, I hiked up the steep trail to the entrance (free but strenuous – allow 60-90 minutes). Bringing my own water and snacks saved another $15-20 compared to the overpriced options at the site entrance.

To document this bucket-list experience without lugging heavy gear up the mountain, I relied on my compact travel camera. Its small size belied its capabilities – the image stabilization handled the challenging lighting conditions of dawn at Machu Picchu beautifully, while the flip screen made capturing those classic selfie shots with the ruins a breeze.

Bonus tip: Many travelers rush back to Cusco the same day, but staying an extra night in Aguas Calientes allowed me to soak in the free hot springs (hence the town's name) and rest my legs before the journey back – sometimes spending an extra $18 on accommodation actually enhances the overall experience.

After the Sacred Valley, I took a $15 tourist bus from Cusco to Puno – the extra $5 over the local bus was worth it for the scheduled stops at interesting sites like Raqchi and Andahuaylillas along the way. Puno itself isn't the most charming Peruvian city, but it serves perfectly as a one-night launching pad to Lake Titicaca.

While most travelers book expensive tours directly from their hotels, I walked to the dock early morning and negotiated directly with boat operators. For just 40 soles ($12), I secured a day trip to the floating Uros Islands. The key was joining an existing group rather than chartering a private boat.

Puno's real budget gem is its market food. The Mercado Central's second floor houses food stalls where hearty soups and local specialties cost 5-8 soles ($1.50-2.50). I became slightly addicted to chairo (a hearty Andean stew) from a stall run by a woman who found it hilarious that I was photographing her soup for 'my game research.'

For capturing the unique light and colors of Lake Titicaca, I found my polarizing filter absolutely essential. The filter cut through water reflections to reveal the incredible handwoven reed structures of the floating islands while making the blues of the lake and sky pop dramatically in my photos.

The highlight of my entire Peru journey wasn't found in any guidebook's top 10 list. It was the two nights I spent with a local family on Amantaní Island in Lake Titicaca. At 70 soles ($21) per night including three home-cooked meals, it was also my best travel value.

Rather than booking through agencies in Puno that take significant commissions, I arranged my homestay directly through the Amantaní Island community tourism association (their office is near Puno's dock). This ensured my money went directly to the families. The experience included boat transportation, accommodation, meals, and cultural activities.

My host family – Mama Rosa, her husband Juan, and their three children – welcomed me into their simple stone home with no running water and limited solar electricity. We communicated through my basic Spanish and universal gestures. Each evening, we'd gather around the kitchen's open fire where Rosa taught me to prepare quinoa soup and papa a la huancaína (potatoes in spicy cheese sauce).

During the day, Juan took me hiking to Pachatata, one of the island's peaks, where pre-Incan ruins offer spectacular 360° views of the lake. We passed terraced fields where locals have farmed the same plots for centuries using methods unchanged by time.

The second evening included a community gathering where locals performed traditional dances in colorful attire, then invited visitors to join in. I found myself spinning around the community hall in borrowed traditional dress, laughing as I tried to keep up with the steps.

What made this experience special wasn't just the affordability but the authenticity. Tourism here operates on the community's terms, with families rotating hosting duties to ensure benefits are shared. It's responsible tourism at its best – and costs less than a mediocre hotel in Puno.

For the chilly nights at high altitude, my packable down jacket earned its place in my backpack many times over. It compressed to almost nothing yet provided essential warmth when temperatures dropped below freezing at night in the unheated stone home.