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Hostels:

Hotel Bakpak (1800 645 200):
167 Franklin Street
This large backpackers just off Elizabeth in the city centre is very spacious in the reception area downstairs and the rooms are clean. Long rooms hold two bunks and they also have lockers. Facilities in the hostel are very good with an in-house employment agency, gym and a bar in the basement which is much the same as most hostel bars around the country. Beds in dorms of 4 cost $18 per night

Flinders Station Hotel and Backpackers(03 9620 5100):
Corner of Elizabeth Street and Franklin Street
This hostel is perfect for two things - staying as close to the train station as possible and filling yourself full of junk food. Just off Elizabeth Street, Flinders Station is only minutes away and you'll have to pass McDonalds, Subway and more to get there. Inside, the hostel has all the usual facilities you would expect, and also has lockers in the rooms. 4 bed dorms cost $17 per night