Lets start off by saying that for any Western European Prague is fairly inexpensive. It was cheap a few years back, and it depends on what you are spending you money on. Beer, cigarettes, nightclubs, and eating out is cheap. Beer at €1 or less, a packet of cigarettes is less than €3, nightclubs are often free entry and a good meal will set you back around €10 or €12. However a great meal will cost around €30. The city caters well to every level of visitor.
Travel outside of Prague, even to other tourist centers and you will find everything much cheaper than in Prague.
This is all relative. Earnings of €3000 plus per month is normal in Western Europe. In Prague the average wage is about €1200 per month, half of which often goes on rent. Outside of Prague, Czech average earning are about €800 per month. So bear in mind all those restaurants are not aimed at Czechs but at foreign visitors.
Currency, Czech Crowns
The Czech Republic is not part of the Euro zone, there is talk of it happening during the next few years, but as yet the dates have not been finalized.
The Czech currency is the Crown. The exchange rate hovers around 28 to the €. Czech Crowns can be bought before you go to the country or at any bank or foreign exchange in the Czech Republic, of which there are many around all the major city centers. Sometimes there are touts on the street offering to exchange money – don’t do it, you will only get ripped off.
Most place accept all credit cards, but not debit cards like solo, switch, etc. You can use these cards at bank machine to with draw money in Czech Crowns. There are no restrictions in taking money across the boarders now.
Almost all place in any large city will accept Euros. However the exchange rate will not be favorable and you will receive your change in Czech Crowns.
Banks
As with most other institutions the Czech Republic is a 21st Century country. Transferring money to or from an account in the Czech Republic can be done easily by internet banking. Most banks are open from 9am to 3.30pm, in large town and cities the bank may stay open till 5pm.
The cost of cashing traveler cheques is high. If you have a credit card use this for money, or just a plain old bank card is good enough for the hole in the wall.