Surprisingly, for a town with so many college students, hippies, and vagabonding ski bums, there’s no hostel in Bellingham [1] proper. Travel 20 miles north to stay in a pleasant hostel in the quiet Birch Bay.
For cheap accommodations in town, North Samish Way near the university is the major motel thoroughfare. The quality is unpredictable and the neighborhood is a little spotty, so be wary of snapping up a super cheap rate over the phone at a motel you haven’t vetted. One of the best values is at the Coachman Inn (120 N. Samish Way, 360/671-9000 or 800/962-6641, $60 s or d). The exterior here looks a bit worn, but inside the rooms are updated and clean. Plus it has an outdoor pool, hot tub, and sauna.
Another clean and safe establishment is Bay City Motor Inn (116 N. Samish Way, 360/676-0332 or 800/538-8204, $75 s or $85–95 d). The rooms are accessible only via indoor corridor, and there’s a fitness center, billiard table, laundry facility, and free continental breakfast in the morning. Spend a little extra coin and rent one of three whirlpool-tub suites for $125 d.
Or just go for the bed and breakfast option. The imminently affordable 
DeCann House B&B (2610 Eldridge Ave., 360/734-9172, www.decannhouse.com [2], $90–110 d) lets two guest rooms with private baths. This 1902 charmer is adorned with stained glass, etchings, family heirlooms, and fine views of the San Juan Islands [3]. Unwind with a cue stick or book in hand in the English-style library. This alluring room makes you wish for a smoking jacket and glass of brandy with its dark wood, floor-to-ceiling bookshelves and classic billiard table. Kids are accepted here by prior arrangement.
Links:
[1] http://www.moon.com/destinations/washington/north-puget-sound/bellingham
[2] http://www.decannhouse.com
[3] http://www.moon.com/destinations/washington/san-juan-islands