Research before you go
Don’t go in blind -- get a better sense of prices, deals, and free attractions before you arrive. Read blogs, follow locals on Twitter, and don’t be afraid to ask questions of the Peruvian coworker who works in accounting (assuming you're traveling to Peru). Some good resources for learning about your destination are BootsnAll, Nomadic Matt, Travelfish, Rick Steves, and Lonely Planet. Remember, when you go in prepared, you reduce the likelihood of getting scammed or overpaying.
Visit the local tourism office
Local tourism boards have their finger on the pulse of what to see and do in each their cities. Not to mention what the most beautiful attraction is in an area. Hit 'em up when you arrive for info on free events -- and don't forget to grab the flyers, as they frequently offer discounts.
Ask your hostel for information
Hostel employees interact with budget travelers every day and keep up to date with what is going on. Even if you aren’t staying there, stop in and pick their brain; they usually keep a running list of activities and are happy to share/talk to somebody who's NOT playing Wonderwall on a guitar in the lounge.