Londoners never talk about how much money they have: That would be sort of, you know, just a bit American. But they'll readily tell you how little they spend. This is one place where cheap, the word as well as the concept, is definitely chic.

It's easy to get into this cheap, cheaper, cheapest mentality in a city where a movie ticket or a paperback book costs $12, a good dinner out runs $140 per couple and Burger Kings charge a quarter for those little packets of ketchup. When I moved here last fall, I found out the hard way that London is, and don't let anyone tell you any different, amazingly and astoundingly expensive. Basically, what costs a dollar in the United States costs a pound -- nearly double -- here. At the newly ubiquitous Gap stores, for instance, Levi's 501 jeans go for 40 pounds, or about $80.

So what's a money-conscious traveler in London to do? Well, experience London the way the British do, of course -- the cheap way. And the really good news is that London is one place where cheap often means better.

The first thing you have to do is forget about two of the usual joys of traveling: restaurants and shopping. It's simply not worth it. If you eat in great restaurants and order whatever you want, you can easily spend $300 a day on food for two people. If you eat in mediocre restaurants and scrimp -- no alcohol, no dessert -- you'll still spend maybe $150 and the food will be somewhere between undistinguished and awful.

Better, then, to splurge on a few wonderful and quintessentially English meals -- dinner at Rules (35 Maiden Lane), a classic wood-paneled roast beef restaurant near Covent Garden, for instance, and tea at the Ritz (at Piccadilly and Queen's Walk) -- and to eat the rest of the time at pubs, museum cafeterias (the Victoria & Albert has a wonderful one) and sandwich shops, the best bargain of all. Think of it this way: Combined with all the walking you're going to do, a visit to London could be as slimming as a spell at a fat farm.

Likewise, shopping can be depressingly expensive. If you see shopping in a foreign city as kind of an exotic sport, it's best to visit those stores that have something to offer by way of tourist value; Harrods Food Hall, for example (at Brompton Road and Hans Crescent in Knightsbridge, SW1), or the General Trading Company (144 Sloane St., SW1), where Princess Di buys gifts, or the big Liberty store (210-20 Regent St., W1), or the Conran Shop (not the same as the U.S. version) in the spectacular restored Michelin House (81 Fulham Road, SW3).

Covent Garden (ringed by Bedford Street, King Street, Bow Street and Maiden Lane) is fun, in a Baltimore Harborplace kind of way, and boutiques such as Workers for Freedom (trendy clothes) and Smythson (stationery) can be entertainingly English. There's even a shop now in Buckingham Palace, which doesn't sell Andy and Fergie mugs but does offer such valuable souvenirs as Buckingham Palace matches.

But the best -- and most entertaining, as well as most reasonably priced -- shopping is to be found where the English shop: at Marks and Spencer (458 Oxford St., W1), where everyone from Margaret Thatcher to the milkman buys his underwear and where the Princess of Wales buys take-out food; and at street markets. Forget Petticoat Lane unless you're into mob scenes and purple Lurex shirts, but if you're an early riser you might want to visit the hip-again Portobello Road on a Saturday morning.

Even hipper, less touristy and open on Sundays as well are the markets in Camden Lock, a group of old warehouses and alleyways between Chalk Farm Road and the canal. Camden Lock is not to be confused with Camden Passage, a very good and very British (though not precisely cheap) Saturday antiques market in Islington.

Where is Islington, you may be wondering. Where is Chalk Farm Road? Or Portobello Road, for that matter? The one book you need to get before you arrive here -- or to buy as soon as you land -- is "London A-Z," England's third-best-selling book after Shakespeare and the Bible. There's no shame in openly carrying your "A-Z" and consulting it frequently; native Londoners do it all the time. And it will help you find all the wonderful places in London that are far more interesting than the West End.

Of course, once you've pinpointed Islington on the map, you've got to figure out how to get there. Take the tube, everybody says, including me. But journeying underground in a foreign city can be fearsome, and doubly so in London, where by all appearances the Underground seems as grimy and noisy and labyrinthine and generally as terrifying as New York's. The thing is, it's not. Rather than marauding bands of youth, you'll find little old ladies knitting tea cosies; rather than indecipherable, graffiti'd maps, you'll see huge, easy-to-follow charts in every station and on every train.

What can be intimidating are the fares, which differ depending on destination. I walked miles when I first arrived here because the idea of getting on a bus and trying to pay the driver put me in a panic. Then I realized I could solve all that by buying off-peak Travelcards -- available at any tube station or from many news agents -- which let you go wherever you want after 9:30 a.m. on buses or trains for 2 pounds, 40 pence (about $5) a day, or 10 pounds (about $20) a week, with reduced rates for children. And hopping on a double-decker bus, any bus, and riding along on the top deck is a great stand-in for conventional but pricey tours. If you get terminally befuddled, you can always hail a black cab -- luxurious and efficient, albeit expensive.

Now that you can get around, where are you going to go? One satisfying excursion may be to Kensington, home of London's haute bourgeoisie, where you can tour the museums, visit Kensington Palace and stroll through Hyde Park on a single trip ... well, maybe two. The Victoria & Albert (antiquities, costumes); the Natural History Museum (gems, dinosaurs); the Science Museum; and the Geological Museum are all right next to one another. Although the suggested admission for each museum is 3 pounds (about $6) for adults, you can pay what you wish. Just behind the museums is lovely Hyde Park, and just through Hyde Park is Kensington Palace, home of Chuck, Di and the boys, as well as other royal personages. You can tour the state apartments and view the Court Dress Collection (the current one includes Di's wedding gown) for 2 pounds, 40 pence.

Another good day trip is to Hampstead, which is the Georgetown of London. Most tourists visit Hampstead on Sunday, because it's one of the few places in London where shops are open. But the shopping is uninspired -- the high street seems eerily like an upscale American mall -- and of far greater interest might be wandering through Hampstead's winding and charming streets, keeping an eye peeled for such resident luminaries as Sting, Jeremy Irons and Boy George; hiking through the Heath, which is simply a huge wild park; and perhaps visiting Highgate Cemetery, where Karl Marx and George Eliot are buried.

If you're inclined toward cerebral rather than physical pursuits, you might want to avoid the Heath and head instead for John Keats's house in Hampstead, which is both elegant and free, or the Freud Museum in nearby Swiss Cottage, where you can view the couch that spawned psychoanalysis. In fact, homes of famous dead people are a good and cheap bet for touring throughout London: Dr. Samuel Johnson's house is at 17 Gough Square near Fleet Street in The City, Thomas Carlyle's house is at 24 Cheyne Row in Chelsea, and Charles Dickens's house is at 48 Doughty St. in bleak Bloomsbury.

What you're after here is both a glimpse into everyday British life as well as a sense of "Wow! I'm really in London!" For a free jolt of the latter, you might try a visit to St. Paul's Cathedral, a duck-feeding foray through St. James's Park followed by a gander at Buckingham Palace, or a stroll across Tower Bridge -- though the Tower of London itself, England's most popular tourist attraction, is boring and, at almost $10 admission, a rip-off. You might also want to narrow your view by taking in one of the free lunchtime lectures at the Tate Gallery (at Atterbury Street and Millbank, SW1) or a free noon concert in the lobby of the Royal Festival Hall (at the South Bank Centre, South Bank, SE1).

If all this wandering about has you bone-weary, and you're staying in a bed-and-breakfast that doesn't even have private showers, never mind a pool or a gym, don't fear; physical restoration is easily and cheaply at hand. The London College of Fashion (20 John Princes St., W1), which trains students in all manner of beauty therapy, offers ridiculously cheap treatments to those willing to be guinea pigs for its trainees -- a massage by a first-year student for 1 pound, for instance, or by an advanced student for 3 pounds. Call ahead to find out when certain classes (and therefore treatments) are being held.

Or you can work out in a first-rate gym, swim in an Olympic-size pool and take a sauna, all for somewhere around 3 pounds, at one of London's municipal sports centers. There's one in Swiss Cottage (at Winchester Road and Finchley Road, NW3, telephone 586-5989) that includes not one but three swimming pools and offers an amazing gym program -- picture a basketball court filled with outsize inflatable toys and 50 toddlers -- for children under 5. For details on locations and opening times of other city sports facilities, call the London Sports Council at 260-1457.

However, you may worry that seeing London the cheap way isn't seeing it the right way. Take my word: The neighbor from down the street who raved about her day at Harrods saw only other Americans and paid double for the same stuff she could have bought in Silver Spring; the guy from the office spent three hours in line and almost $10 to be herded past a few measly jewels at the Tower of London; your friend's mother, who assured you that British food has become wonderful, is lying.

And if that doesn't make you feel any better, maybe the fact that you'll arrive home with 10 pounds off your hips and 1,000 pounds in your pocket will.

For more information, contact the British Tourist Authority, 40 W. 57th St., New York, N.Y. 10019, 212-581-4700.

Pamela Redmond Satran is a freelance writer currently living in London.