Is it safe to drink the tap water?

No. Always use a filtration system or purchase bottled water. Using a filter bottle saves you about $2-3 a day.

Should I bring US dollars or local currency?

Bring US dollars in pristine condition to exchange for Soles, or use your debit card at major bank ATMs (like BCP or BBVA) which often have lower fees for local accounts.

Backpacking Peru on a Budget

Backpacking Peru on a budget is best achieved by sticking to overnight buses, eating at local 'menú' restaurants, and booking regional tours directly with local operators in Cusco or Huaraz rather than online. You can comfortably manage on $35 to $45 USD per day if you stay in hostels and prioritize public transport.

Use Cruz del Sur or Oltursa overnight buses. Book overnight buses between major cities like Lima, Cusco, and Arequipa to save on a night of accommodation. Always opt for the 'Semi Cama' or 'Cama' seats for safety and comfort.
Eat the daily 'menú'. Look for restaurants offering a 'menú del día' for lunch. For about 10-15 Soles ($3-$4 USD), you get a soup, a main dish, and a small drink. This is how locals eat and is significantly cheaper than dinner menus.
Book tours locally. Never book treks like the Inca Trail or Salkantay online through international agencies. Wait until you are in Cusco and walk into local agencies in the city center to negotiate a price. You will save 30-50%.
Use public 'colectivos'. Instead of private taxis or expensive tourist shuttles, use 'colectivos' (shared vans) for regional travel. They are cheap, reliable, and run when full.

Is it safe to drink the tap water?: No. Always use a filtration system or purchase bottled water. Using a filter bottle saves you about $2-3 a day.
Should I bring US dollars or local currency?: Bring US dollars in pristine condition to exchange for Soles, or use your debit card at major bank ATMs (like BCP or BBVA) which often have lower fees for local accounts.