Accommodations take almost half the budget of any vacation. Hotels are the obvious choice, but most of the time, they are overpriced.
Swap homes - Home exchange has been around since the 1950's. Want to visit San Francisco? For a small annual fee, home exchange clubs such as ExchangeHomes will put you in touch with members living there that want to visit your city. You fly to San Francisco and stay in their home, while they fly to wherever you live and stay in your home. No money ever exchanges hands. Risky? Not necessarily. People have been doing it for years with mostly positive results. If you're hesitant, you may go with clubs that offer customer assessment and choose somebody who has positive reviews from other members.
Swap homes with their owners included - Imagine staying at a stranger's house while he's there. Hospitality clubs connect home owners willing to open their doors to strangers with the strangers looking for a place to stay. This is not a great idea if you have kids or if you need privacy (after all, you are expected to socialize with these people), but otherwise it could be a very interesting way to explore the local culture, especially if you are vacationing far away from home.
Stay in a monastery - Many are open to visitors for a minimal fee or even a free-will offering. Most offer simple meals and the opportunity to participate in daily prayer or meditation. If you're looking for a place to relax and connect with yourself, monasteries, abbeys, and convents can be a fascinating option. Again, this will not work if you have kids.
Rent a "holiday" apartment – Available by the night or by the week, they are a cost-effective alternative to hotels, and have the additional advantage of allowing you to cook your own meals, a great money saver.
Sleep under the stars – Camping is not the untamed experience it used to be. Campgrounds offer all type of conveniences, from showers to electrical connections and Laundromats. Modern camping equipment will keep you warm and comfortable. Some campgrounds even rent tents and rustic cabins.