Budget travel...the phrase literally means travel within a budget. But everyone has a different budget they're working with.
To some, budget travel means traveling for as cheap as possible, scrimping on everything. To others, it means getting the most that they can for the money they have to spend.
I prefer to follow the second point of view. Budget travel should be about getting the most out of your trip that you can for what you have to spend. Sure, it's about saving what you can where you can - I mean, who really wants to overspend on anything? But every once in a while, it's not so bad to upgrade on the accommodations or put aside a few bucks for a spa treatment to ease your tired bones from those hostel beds.