Im portuguese and lived in Lisbon so I can help.
Affordability is great...super cheap most things. For an American, youll find that having fun and going out is quite cheap. A full meal with soup, entree, dessert, coffee and juice/beer during lunch hours can be had for as cheap as 7 dollars and these are not fast food places.
At night prices go up but not by a lot... you can go to a restaurant and pay 10-15 dollars a person depending if you have wine or not and what place you go to.
Plenty of trendy nice places that are cheap.
Transportation is cheap. You can have a monthly pass for about 30-40 dollars that enables you to ride the bus/subway/train system.
Alcohol is cheap. Even in bars at night, Bairro Alto, you can have a pint for about 1 dollar ... on trendy night clubs, beer is usually 3 dollars and hard liquor (vodka, whiskey etc) sits around 6-7 dollars.
Gasoline on the other hand is expensive at around 6 dollars per gallon.
Lots of things to do for cheap or free... if housing is covered, if you spend 700 dollars in 1 month youll do A LOT!
Groceries are cheap - think sirloin for about 3 dollars a lb... seafood is cheap...
If you want, you can contact me directly and ill let you know all the good places that a local would go and trips around Lisbon or even outside lisbon that you can go...
If needed you can even rent a car as cheap as 2 dollars per day and travel a bit around Portugal, which is worthwhile in the little villages and towns to the south and north as well.
The vibe is great... most people, or at least the new generation up to 30ish years old... what is common is people getting together in the many gardens and lookout spots where people gather and have some snacks or wine/beer ...most bring their own wine/beer which is bought from the grocery store since is cheaper. Wine you can buy for 2 dollars a bottle good wines...
Actually, one of the Portuguese wines that made the top 5 of best wines in the world for Wine Enthusiast magazine or something, costs 3 dollars ... :D
A locals/tour guide with lots of info is this:
http://www.lisbonlux.com/