Think of Melbourne as Sydney’s shy but sexy little sister, who doesn’t scream out for the spotlight, but once you get to know her, va va voom. I tacked on a couple of days in Melbourne at the tail end of my recent Australian travels, and regretted not having more time to idly explore the subtle charms of this captivating cosmopolitan capital, pulsing with creativity and cultural flair.

While lacking the major blockbuster attractions that typically reel in the international tourists, Melbourne’s real allure is uncovered while exploring its city-within-the-city, on its tucked-away “laneways” that sneak away from the wide, well-ordered, and trafficked streets of Melbourne’s polished facade. Here, a rich-in-character back-door world of bustling back alleyways brimming with quirky bars, trendsetting boutiques, cozy cafes, edgy art galleries, and multicultural restaurants is unveiled, all overseen by a vibrant and unrivaled street art scene.

Unassumingly traversing the city grid, this maze of onetime service lanes for the then-emerging Melbourne’s horse-and-cart deliveries and sanitation pickups was brilliantly reinvented to take on new life in the 1990s. Today, some 200 lively laneways have evolved into a hive of alfresco urban street art galleries and hip-yet-covert cultural and nightlife hubs. Aimlessly ambling about will assuredly turn over a hodgepodge of lively laneways, with even lifelong locals stumbling upon regular surprises.

For those short on time or seeking well-vetted insight into the most happening of these hideaways, the walking tours of Hidden Secrets Lanes and Arcades Tour can help demystify the laneways and serve as a reconnaissance mission for independent exploration after the fact. The 3-hour morning tours typically cover 15 to 20 laneways, make pit stops for tea and honey tastings, and cover history, architecture, specialty retailers, and more; rates from $95/person.

Then, follow up on a few choice favorites. For a bite to eat, try the alfresco eateries of cobblestoned Hardware Lane, or quench your thirst at bars like the beer garden-esque Section 8 on Tattersalls Lane (pair cocktails with some of the city’s best dumpling houses on the same Chinatown block), the cocktail laboratory that is The Croft Institute in Croft Alley (a bar with staying power, set at the end of long alleyway), and the rockin’ Cherry Bar on ACDC Lane (named for Australia’s most famous rock-and-roll export).

Sample Melbourne’s café culture craze and topnotch people-watching on fashionable DeGraves Street, or squeeze into pocket-sized cafes and eateries on Centre Place, which also showcases some of Melbourne’s best street art. For more exceptional street art, stroll down colorful Hosier Lane, an ever-changing street gallery featuring dozens of local and worldwide street artists who display spray-painted murals, paper “paste-ups,” stencils, mixed media installations, and more.

Street art in Melbourne is highly regarded and heavily regulated – works are either commissioned by local establishments or self-funded by exposure-seeking artists who apply for city-issued permits. Sides of buildings serve as dynamic alfresco galleries, with rotating canvases that can change out from day to day (many galleries in the city center also exhibit featured street artists if you’re looking to take a piece of it home). For a curated insider’s perspective on the best art laneways, try the street artist-guided Melbourne Street Art Tours; 3.5 hour tours cost $69/person.

While in town, bunk down at the 128-room Space Hotel, a hip hotel/hostel hybrid close to some of the best laneways and featuring mod designer rooms trimmed with iPod docking stations, flat-screen TVs, and comfy beds; plus a rooftop garden, cheap pub grub (like $5 pasta and pizza), and in-house cinema. Rates for shared dormitory rooms start from $36 per person, per night, while private standard rooms start from $97/night (double occupancy).

Incurable travel addict, longtime travel scribe, and mindful money-saver Elissa Richard is currently indulging her insatiable wanderlust on an epic 14-month journey around the globe – intent on making it every step of the way without busting her modest budget. Follow her along the way as she reports back with budget-savvy travel tips from the mountains of Transylvania to the wilds of Tasmania, and from the little-trodden temples of Burma to the bustling bars and clubs of Buenos Aires. A vagabond in search of value, just for ShermansTravel!