The best piece of advice for those looking to do Koh Phangan on a budget is to get familiar with the Baan Tai 7-11. It is the best 7-11 on the island and has much cheaper prices for food and drink than the resorts, bars and restaurants nearby.
The hostels in Baan Tai and the rest of Koh Phangan don’t offer a communal kitchen to cook food. This limits the amount of money you can save by not eating out. If you stay in Thongsala there is the night market, Walking Street and Tesco Lotus to find cheap, ready-to-consume food items. If you are staying in Baan Tai the best place to head is the 7-11.
They have a selection of pot noodles. You can get free hot water near the check out. There is also a hotdog counter where you add your own garnish. Next to it is a coffee machine.
The sandwiches are a bit Thai, and by that I mean odd by Western standards.
On the counter is a hot plate where they have Chinese buns. My favourite is the meat buns without boiled egg. Getting the right bun needs a bit of Thai language skills. It is worth it as they are cheap and filling.
There are plenty of drink choices. There is 10 Baht water as well as sports drinks and of course plenty of cold beer.
Outside the 7-11 you will normally see someone eating or having a beer and a fag. The place attracts the other-worldly last stragglers from the Jungle Experience and the Half Moon Party. If you are not at their level of consciousness it is a good idea to avoid starting a conversation.
I used to do the moped run from Thong Nai Pan to Thongsala all the time. I often broke up the journey with breakfast at the Baan Tai 7-11.
For tobacco I always went to one of the shops in Thongsala high street. At the same place I used to pick up mosquito repellent.
The longer you stay in Koh Phangan the more you come to appreciate the few places where you can get a bargain.