Traveling to Egypt can be done without spending a ton of money. The cheapest way to get there is to check which low-cost airlines fly into the major tourist's cities. From Europe, cheap flights can be found flying into Sharm el-Sheikh, Hurghada and Luxor. Once in these cities, one or two day trips can be arranged to visit Cairo or other popular destinations. Hostels are not very common outside of Cairo. So if you're visiting another city, you might have to pay a little more for a budget hotel. It's a good idea to check directly with the hotel. Travelocity found a great deal for me at 18 euros a night for a hotel. I contacted the hotel and they charged me 14 euros a night for the same room.
All-inclusive hotels are very popular in Egypt and sometimes it can come out cheaper doing it this way. But first of all, figure out how many lunches and dinners you will actually spend at your hotel. Many day trips have meals included, so if you book all-inclusive and do a couple of day trips, you might end up paying twice for a few meals.
Day trips are very common in Egypt. I found deals to go 4 wheeling in the desert, diving in the Red Sea, to visit Israel or Jordan, and to fly to Cairo, Luxor or any other city that you want to visit. To get the best price, you have to shop around. Like in most places, these trips at your hotel will be more expensive. Visit different online travel agencies and price the one that is the cheapest but also willing to go on the day that you want to travel. Before you arrive, I would suggest only booking a day trip that involves a flight. This way your trip is guaranteed. All others can be booked once you arrive.
Haggling is essential in Egypt. Taxis, in the market, and especially day trips. Be sure to fix your price before getting in the taxi. If you find a local travel agent, don't take his first price for a day trip. On a recent diving trip in Sharm el-Sheikh I paid the same price for 2 dives as another couple paid for 1 dive. And I'm sure someone else paid even less than I did!
Like in most countries, safety is a big issue in Egypt. However, do not be quickly put off by what happened there years ago. Egypt is a big country; therefore what happens in one city or neighborhood is not indicative of what is taking place throughout the whole region. On my recent trip to Sharm el-Sheik, I heard that 4 bombs went off in Cairo 3 days before I was supposed to go to there. I spoke with other travelers who were in Cairo on the day of the bombings and they reported that they didn't see or hear anything about them. The bombings were in a residential area not frequented by tourists. Of course I proceeded with my plans, visited Cairo and felt very secure. No matter where you go, just use your own good judgement.