I recently discovered the concept of free walking tours on a trip to Prague in the Czech Republic. The concept of a free walking tour is that the guide is paid in tips rather than you paying a set rate to go on the tour itself. I had never heard of this before but it sounded like a bargain and it really was. The tour itself was a 3 hour walking tour through the Old Town of Prague and our tour guide was very knowledgeable and fun. The tour was so good that later we booked a tour that did have a set rate with the same guide (these free tours are a clever marketing campaign also).
Now tours overall are the best way to see a city and know exactly what each building is and significance it has to that culture. Realising that people do travel on a budget which means hiring a personal guide is out of the picture there are cost effective ways out there to still get a great tour experience. Free walking tours are available in a number of European cities including Prague and are something that I recommend for all travellers. It is a good way to get introduced to the city as well as finding a tour group that you are comfortable for potentially more tours during your stay.