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Bohova Travel for great Santa Cruz information.
There are unfortunately not really any affordable places to live around Santa Cruz if you are on a tight budget. Best to think about having roomates... San Jose and Watsonville are a little cheaper but still expensive.
That being said, I think that if you really love it there you will find a way to stay as many people do. It is a great city with a great mixture of personalities.
As far as fashion goes, it is very much casual in every aspect. There are no good places to go and buy really nice clothes unless you go up to San Fran., it is rare to see anyone in a suit or a tie, and there are really no restaurants that you couldn't walk into with shorts and a t-shirt and raise any eyebrows (besides Oswalds, and it's closed right now for relocation).
Come visit for a weekend and take a drive around westcliff, highway 1, USCS campus, and Cowell State Park with all of the beautiful redwoods. The weather is 90% of the time perfectly cool and sunny.
Good luck!
Chris