One of the more expensive countries in South America, but an incredible diverse country nonetheless. I travelled (mainly by coach) from the southern tip of Chile to the north, sleeping under the milky way in Patagonia, to cycling through the driest non-polar desert in the world. Chile has everything a backpacker could desire.
Hostel dorms start at $7,000 CLP and go upwards. Expect to pay more in southern Chile (i.e Patagonia).
A meal at a local restaurant with a drink can be as little as $5,000 CLP.