Despite the recent strength of the yen, Kyoto is a bargain compared to cities like London, Paris, New York or Sydney. In fact, for less than you might spend on a good hotel in any of these cities, you can get a comfortable room, eat two good meals, see some incredible sights and have enough left over for a drink in the evening.

Kyoto is packed with reasonably priced accommodations. For about 8,000 yen you can get a twin room in a mid-range “business hotel”, where rooms are usually small, but spotless and fitted with all the amenities a business traveller would need. Good business hotels in Kyoto include the Toyoko Inn Kyoto Gojo-Karasuma and the Kyoto Palace Side Hotel.

If you do not mind sleeping in a space the size of a roomy telephone booth, then consider one of Kyoto’s affordable capsule hotels, which offer sleeping pods just big enough for you and your iPod (bathing facilities are shared and luggage is stored in lockers). You can choose from the ultramodern 9h (Nine Hours) or the wonderfully quirky Capsule Ryokan Kyoto, which offers capsules in the style of a traditional ryokan (Japanese inn). A capsule at these places will set you back between 4,000 and 5,000 yen and Capsule Ryokan Kyoto offers excellent twin rooms from 8,000 yen).

Once you have your accommodation sorted, it is time to explore the city. Kyoto may be Asia’s most bicycle-friendly city – it is mostly flat and drivers are relatively sane – so consider renting wheels at a place like Kyoto Cycling Project (from 1,000 yen per day). You will save on bus and subway fares, and be able to move around at will. If you opt for public transport, pick up a one-day bus/subway pass for 1,200 yen.

Surprisingly, some of Kyoto’s most impressive attractions are free -- such as all four of Kyoto’s imperial properties: the Imperial Palace, the Sento Gosho, Shugaku-in Rikyu Detached Palace and Katsura Rikyu Detached Palace. Just bear in mind that you will need to make reservations at the Imperial Household Office, and that people younger than 20 years of age are only allowed into the main property, the Imperial Palace.

If you cannot secure a reservation, there are plenty of other places that are free and can be visited without a booking. One of Kyoto’s most beautiful Zen temples, Nanzen-ji, can be toured free of charge (but there is a fee to enter the enclosed rock garden). Likewise, there is no entry fee at Chion-in, which some people call “the Vatican of Pure Land Buddhism”. Sitting in the soaring main hall listening to the monks chant is magical. Other free-of-charge temples include Tofuku-ji and Honen-in, an exquisite little temple that many visitors overlook.

After exploring the world of Japanese Buddhism, step back in time and enter the realm of Shinto, Japan’s indigenous religion. Almost all Shinto shrines in Kyoto can be visited for free. Fushimi-Inari-Taisha, in the southeast of the city, is one of Japan’s most incredible sights, consisting of hypnotic arcades of vermillion torii (Shinto shrine gates) cascading across a green mountainside. You have probably seen pictures – but no camera can capture the atmosphere of this place.

If you fear that eating out in Kyoto will require a second mortgage on your home, you are in for a very pleasant surprise. An excellent sit-down dinner can be had for 1,000 yen per person. And if you want to go cheaper, sample a tasty bowl of noodles (ramen, soba or udon) for around 700 yen – try ramen shop Karako in the northern Higashiyama sightseeing district. If you want to experience one of Kyoto’s sublime kaiseki (haute-cuisine) restaurants, do like the locals and go at lunch when you can usually get a set meal for around 3,000 yen per person.

At the end of a great day in Kyoto, settle in for a couple glasses of the good stuff (1,200 yen) at a sake bar like Yoramu.

The article 'Kyoto on a budget' was published in partnership with Lonely Planet.