This is a warm, friendly hostel with staff who can tell you all about what's great to do in the surrounding area. Free breakfast is included in the rate, so you can save your money for more important things!
The Palace Backpackers
This is a beautiful, homely hostel which offers you a terrace, bbq, kitchen facilities, comfy beds and a free breakfast!
YHA Nelson Central
This is a good one if you want easy access to Nelson's surrounding National Parks and Coastline. It's also in the centre of the city so you won't be short of things to do.