Reasonable budget for two weeks.

Switzerland was sticker-shock-inducing for me even in the 1970s and 1980s, so I do sympathize.

There have been a few threads--probably in the Switzerland forum--over the last two years or so that discussed the question of food costs and offered moderately-priced options. If you scroll back through that forum, looking for pertinent thread titles, I think you'll find some useful information.

I suspect if I were traveling to Switzerland now, I'd be consuming a lot of sandwiches, fruit and yogurt. And cheese! Cheese from a market, bread from a bakery--I do that even in cheap countries.

i hope you all don't need to drink coffee; it adds up in Switzerland.
500 USD = 470CHF
Look into the SuperSaver train fares. They are limited non refundable and non-exchangeable and only good for the time and route you book them for but cost usually 50% less

Thank you for the information. No coffee drinkers here (husband drinks at home but can stop cold turkey for three week trips, does it every summer). No alcohol except maybe one bottle of wine at a 5 night stay, bought at grocery store. In those ways we are very low cost people.

Hard to say. Groceries are not that much more expensive if you are cooking in. Restaurants can go through the roof. I go for skiing and stay in nice hotels that offer a huge breakfast buffet and 3 and 4 course dinners in the evening. Double occupancy during less-than-super prime time (late January) at major resorts runs about 150 CHF per day per person, so I am thinking you could beat that.

One way to save money is to reconsider passes. The 30 day Half Fare Card saves more than a Swiss Travel Pass 95% of the time, and I've done the calculations many many times. Do the exercise and price all the trips out your self. It is easy to do, if a bit tedious. A spreadsheet helps. You're paying for that hop-on hop-off convenience with out having to stop and buy tickets. And even the Travel Pass only gives a 25% discount on the ride to the Jungfraujoch. Half Fare card gives 50%.

Ask any Swiss and the answer will be, "Yes, it is expensive, but everything is better in Switzerland than anywhere else. You should have to pay more for the best." Pride or arrogance, you tell me.

You can call up the Tourist Information office in each city you want to stay in and get free guidance and recommendations for the kind of apartment or hotel you want in their area. Those offices are official government bureaus and have always steered me in the right direction, often with personal insights and specific apartment or hotel recommendations. The Rick Steves Switzerland guide book gives their contact info, but you can find their web sites usually by typing the name of the city followed by either .com or .ch
Or go into the site, "mySwitzerland.com" for contact info of which ever city you want.
Here are the Tourismus web sites for the cities you mentioned in your posting:
http://www.luzern.com/en/
https://www.zermatt.ch/en
https://lauterbrunnen.swiss/en/summer/#eat-and-stay
https://www.montreuxriviera.com/en/

For saving money on food:
A fresh croissant from a bakery costs about one and a half Swiss francs. Buy sandwiches for about 6 Swiss francs at any bakery or grocery store. Buy cheese and salami either in grocery stores, or in cheese or meat shops (chaiserai or metzgerai -- spelling?) or at farms you hike through. I think I recall that the hard-boiled eggs (called "picnic eggs") ran about 1 or 2 francs per egg in grocery stores, and the price was about double that of uncooked eggs. (Most eggs are not refrigerated in Switzerland.) I think I recall that fresh meat or fish in the grocery store was about 25 francs for 2 servings. Vegetables and fruit were more expensive than in the US, except when I caught a sale. The best tasting fruit I found was in an outdoor market, open every day, that's beside the Pfistern restaurant next to the Reuss River in Luzern. Restaurants serve daily specials (tagesteller) at lunch time that are hearty meals for lower prices than in the evening.
Also, many large grocery stores have a cafeteria with lower prices than restaurants. The main grocery stores throughout Switzerland are Co-op, Migros, and Manor Department Store.

Wine and beer are much less expensive in Switzerland than in the US. Soft drinks are much, much more expensive in Switzerland. Most apartments I've been in come with a coffee maker on the kitchen counter. If you order tap water in a restaurant, they'll often still charge you a fee, so you might as well order bottled water, if that's what you want. It's still cheaper than a regular drink.

Switzerland generally costs 2 original van Goghs per person, per week. I don't know how many van Goghs you have, so it may not be a big deal to you. If you sleep cheap and picnic more than dine, then you might whittle the cost down to a Paul Klee per person, per week.

I agree with Sam about the Half-Fare Card versus Swiss Pass. In planning 5 trips to SW in the past few years, a Swiss Pass has never penciled out. The Berner-Oberland Regional Pass and the HFC nearly always work out to be a better option. The HFC is a complete no-brainer.

I sent you a PM with a lodging recommendation in Lauterbrunnen. We do not eat dinner out there very often preferring to cook, but we do lunches out at the mountain huts. For dinner out, we do like the restaurant at Camping Jungfrau.

You might see if the apartment at Chalet Fontana in Mürren (right above Lauterbrunnen) is available. It is 220 CHF a night for four people, breakfast included.

http://www.ferntree.ch/chalet/fontana_summer.htm

The apartment has two bedrooms, one with a double bed and the other with twins. One bathroom. The other room is a large kitchen with dining table. We have stayed here several times with our family.

Thank you for all the information. I have spread sheet all the costs and the STP is 97 Franks cheaper per person for us. That includes Jungfraujoch. The links to the tourism websites in Luzern and Zermatt have been searched and I guess proved that what we are seeing are reasonable costs. The thought of grocery store meat for 2 people for 25 franks, my spouse said I am not eating meat then, I am sure that will not be the case but I think he was stunned. We are planning away and now working on being prepared. Food is probably the hardest thing for us as we are not foodies. A good meal is great, a so so meal that we paid a ton for is depressing.

STP means Swiss Travel Pass?

Unfortunately it does not fully include the Jungfraujoch; it only gives you a discount of 25% above Wengen.

If you work through the ticket purchase thing n Jungfrau.ch you will see that from Lauterbrunnen a return ticket up the Jungfraujoch and back is 189 CHF without a pass and 142 with a Swiss Pass.

It will however include the Schilthorn this year.

You do know that the first price you see at www.sbb.ch/en assumes you have a half fare card, others wise you have to double it to get the undiscounted price. Just checking.

Yes, I know the Swiss travel pass is only 25% off Jungfraujoch and I learned previously on this board about the SBB website showing the prices at half price already. That is weird to me and I am glad someone pointed that out because that is certainly different from what I did with Italy a couple years ago.

We are just trying to accept the higher than anticipated prices and move on.

I can't speak for Montreux, but YES, you can stay in the Lauterbrunnen region for less than 250 CHF for lodging and 100 CHF for food for a family of 4.
I should start by saying that I grew up in a frugal Dutch family who camped a lot, so I'm used to budget travel. It wasn't as frugal as Rick Steves' first trip to Europe with his buddy (written up as "Europe through the Gutter", I believe), but close.
Let's start at the bottom and work up. If you camp in a "backpacker tent" that's in your backpack, you can camp dirt cheap at Camping Jungfrau. When each of my kids were 13 (about 15 yrs ago), the two of us would stay there for about $10 a night! I just looked it up and now it's around $25, but still a good deal. I doubt you want to camp though.

Next up is staying in Camping Jungfrau's (www.camping-jungfrau.ch) trailers or bungalows. They have kitchens and sleep 4 and are around $120 a night, but they do want you to rent by the week. If your family is used to camping in smaller quarters this could work, if not, check out apartments.

For apartments, I use Google maps ("apartments"), vrbo.com, booking.com, and airbnb.com. If you can't find anything under $300 per night, send me a private mail. I know a property manager in Laut. who can help.

As for food, 6 of us were in Lauterbrunnen this past Aug., with a kitchen, and none of us felt the food was overly expensive. We made fondue, soups, eggs, spaghetti (hamburger is "hackfleish" and maybe 3X more expensive, but still good protein), cheeses, pizza, etc.

Summary: yes, you can do it for much less than the $500 per day you budgeted.

Alternative to tent camping are hostels. Hostels often have private family rooms accommodating 4 to 6 persons. Hostel breakfasts are also cheaper than those offered by the multiple star rated hotels. https://www.hostelworld.com/