Considering most people only find out about Cuzco when they learn that it’s the staging area for virtually every Machu Picchu trip, it’s a bit surprising to learn how delightful, gorgeous, and fun the place is all on its own. Some parts of your Cusco/Machu Picchu adventure will seem outrageously priced, so it’s good that many parts of the whole thing are quite cheap as well.
Flights from Lima (and elsewhere) to Cusco tend to be weirdly expensive, and the train trip to Agua Calientes (if you are doing the day-trip version) or the Inca Trail group tours (if you’ll be walking in) are much pricier than you might expect, so do your research. Here’s how to do the Inca Trail to Machu Picchu on the cheap.
Good news comes in the fact that hotels in Cusco tend to be quite cheap even though standards are fairly high. Several hostels have opened up so if you are a backpacker type you have that option, though the money you’ll save on sleeping is almost meaningless compared to the cost of everything else.
Food and drinks in Cusco are quite cheap as well, as an endless string of restaurants and bars keep things competitive. Pizza in particular tends to be popular in this region and prices are very reasonable compared to where you probably live.