What is the most affordable way to travel with a family?

I would suggest looking at VRBO.com and home away.com. These sites are linked and many landlords cross post. You can usually find an apartment to rent with a full kitchen for reasonable prices. Most of my experience has been in Itsly where I rented 2 bed, 2 bath apartments that we're centrally located for much less than 200 euros per night in Rome, Florence and Venice in May (not yet peak season, but close). You may have to partially prepay at some apartments. I recommend reading the reviews and look at properties that have multiple reviews. By renting an apartment, you can save on meal costs. We typically eat breakfast and some dinners in the apartment. We are usually out touring at lunch time.

If you are driving...depending on time of year...you might consider camping for part of the trip. The campgrounds in Scotland are near some nice parks and lochs, and some are near castles. Some include cabins. They have lots of amenities including laundrymats. Pack your casual clothes in backpacks, bring a packable nylon tent and bedrolls and you are good to go. The Scots are very outdoorsy. I'm a Grandma too...I'll stay at the Farmhouse B & B down the road.

Another vote for vrbo. We always do that if we are 3 or more nights, 1-2 nights is hotel (but we try to avoid that). I only rent places that have multiple positive reviews and have never had an issue, and we have rented all over the US and many in Europe. I usually book really early to get the best places! Good luck!

we stayed in B&B's almost our entire trip in Scotland. We should've used AirBnB more, but we found if we offered cash to the smaller mom & pop B&B's that they would usually give us a discount. We found them all to be very accommodating. One point I'd recommend--when looking to stay in the smaller towns, I highly recommend calling a day or two ahead to make sure their are vacancies. We got extremely lucky in a few places to find something later in the evening for decent prices, but one night we almost had to fork over $250 for a luxury hotel because that was all that's left. Below are some of the places we stayed, all were very reasonable ($75/night or less--via cash discounts)

Edinburgh: Priestville Guest House (Colin was a great host, probably the best Scottish breakfast we had) & MW Townhouse Guesthouse

Aviemore: Mackenzies Highland Inn.

Ft. William: we stayed at the Best Western (this was before we realized how awesome Scottish B&B's are) but it was a good deal

As a follow-up to Camping in Scotland. For tent camping it is only 14.50 pounds for 2 adults. A camper van would be perfect for touring Scotland. At some resorts you can do Glam Camping with a Cottage that has room for everyone and a kitchen for 900 pounds a week. Look up the Scottish National Parks for more info on Campgrounds and activities available. Meanwhile there are B & Bs everywhere. You can pick up rated listings in Tourist Offices or Train Stations.

One more vote for apartments. For groups over two, they are almost always cheaper. And family dinners with local ingredients can be a great deal of fun, and much cheaper than restaurants. Additionally, you will most likely have more space for the kids to run around and a separate room for them to go to bed early in.

Transport is the more complicated question. If you can all fit in one rental car, renting a car may be the cheapest option as it's one price no matter how many people you can cram into the car. But it's worth looking at train tickets and rail passes that offer a discounts or free travel for your four and five year olds. That may tip the balance in favor of public transport. However, we've found that with small children, trains are worth a little extra money just because you can walk around with your kids and take them to the bathroom without stopping.

Another vote for apartments or self catering cottages. Many say "I'm not going to cook and wash dishes" while on vacation, but supermarket shopping in Europe is a great experience for the children and will put you directly in the local culture, a lot more than another meal in a restaurant.

Thanks everyone! Has we are hoping to find a place in the highlands that we can use as a base camp to come back to after day ventures. Any recommendations on a somewhat central area or two maybe? We want to see the Isle of Skye but know that its going to be a ways out. Trying to gauge distances is hard. Thank you!