From free to cheap, you can find somewhere to stay in the Blue Mountains that agrees with your budget. The key is to seek out spots that aren't the usual tourist choices. Here are a few of my favourites to get you started:
If you have camping gear, this is one of the easiest-to-access free camping spots in the Blue Mountains - with an excellent view from Perry's Lookdown and access to one of the most celebrated trails in the Blue Mountains - the Blue Gum Forest Walking Track. Although to be honest, it's more of a hike than a walk with a steep path from the cliff down into the valley linking Perry's Lookdown Campground with the Acacia Flats Campground.
There are basic water-less toilets at Perry's Lookdown Campground, but there's no drinking water, so be sure to bring your own. Also make sure to bring a camping stove as open fires are not permitted. On the other hand, the drive from the campsite to the main road only takes 15 minutes, so it's easy to pop over to Blackheath for dinner.
Gardners Inn is an all-in-one local country hotel, and is the best in the Blue Mountains for having a bit of everything. It's barely a stone's throw from the Blackheath Railway Station and, apart from accommodation, it has it's own pub with open fire place, bistro and restaurant on the ground floor.
The Blue Mountains YHA is walking distance from the Katoomba Railway Station, and even less to the nearby main drag which has some nice cafes and restaurants. A popular option with it's cheap prices and open fireplace. Family rooms also available.
Blackheath Glen Tourist Park Prince Edward St, Blackheath
A wonderful location that has many different options. The Blackheath Glen Tourist Park has cheap spots for pitching your tent, and is one of the best options for families with cosy cabins onsite as well. These cabins have kitchens with utensils - allowing you to keep your costs low by preparing your own meals.
These cabins are also equally suitable for couples or singles and the place has a nice atmosphere - quiet and close to Pope's Glen Walk that takes you into the heart of Blackheath's most pictureque spots - Govett's Leap, Pulpit Rock and more.
Easy to access if you aren't driving up as it is 10 minutes walk from the Blackheath railway station, but is in no way on the main drag. Near the Blackheath swimming pool and the pretty Blackheath Memorial Park.
I can't overstate the value of Airbnb. This is one of the most competitive means of finding accommodation both in the Blue Mountains - and elsewhere.
Because you will be mostly staying in private homes, it is a great way to meet locals, get information on how to get around the place cheaply, and be able to stay in places that normally wouldn't be stayed in by tourists.