Daily cost: £40.
Bargain: Lisbon's back alleys serve up lovely little family-run restaurants that are considerably cheaper than the equivalent in Spain, while apartments facing the sea can be rented for a snip. The Algarve is also primed for cheap stays, while Madeira's beautiful quintas are very reasonable, with some converted mansions offering rates around £25 per night per person.
Why visit: Lisbon offers a gastronomic adventure for a song, as well as toe-tapping musical nights out, and lazy days on the beach, watching the fishermen cast their nets. Porto Santo and Madeira are a bit more mellow and preferred by package holidaymakers. Madeira is home to a spectacular market bursting with spices, vegetables and fish (including the indigenous black scabbard fish caught 1,000 metres below sea level), so our recommendation would be to hire a cheap but chic apartment and cook feasts at home.