What do you usually get in the way of freebies on holiday? A welcome cocktail hour maybe? A vanity kit? A certificate?

How about an apartment in a whitewashed Andalucian villa, where you could sit on your own terrace at night, sipping a (free) beer and tuning in to the roar of the ocean, just visible across the street.

Once a hippy enclave, the beautiful beach town of Caños de Meca has, like much of the Costa de la Luz, escaped the developments of the Costa del Sol further east, and retained its counter-cultural spirit. In summer, hedonistic Spaniards are drawn by the beach parties and Ohju, a nightclub famous throughout the country, but at heart, Caños remains a surf bum town, a pretty place to drift along for a while.

Many tourists come here with a campervan or a tent to enjoy the chilled out lifestyle but, as I found last week, it is possible to save on even those costs and live there for absolutely nothing, thanks to a scheme called Workaway.

Workaway arranges free volunteer placements for travellers on farms, small tourism businesses and private homes all over the world, for periods of three weeks up to a couple of months. In return for four to five hours of work a day, you get food and board, and an immediate in to local life.

Riffling through the Workaway website filled my head with giddy dreams. I could become an expert sea-kayaker while gardening at a remote eco lodge in Norway. A winemaker on a Douro vineyard. A conservationist in Madagascar.

But Dave Burton, Workaway's British creator, said he had the perfect place for a short placement. "Simone is German and lives with her two lovely girls [Faye, 11, and San, 9], she has been a host for a couple of years and had many Workawayers passing through. She needs help in the garden, with the kids and other jobs."

Collecting me from a bus stop in a valley below the hilltop town of Vejer de la Frontera, Simone filled the journey with her life story, how she'd arrived in Caños on a whim as a traveller in her early 20s, built Casa de Meca, a tourist apartment villa, and had a family. Now she was contemplating taking the kids back to Germany, believing the serious Spanish education system was starving their creative development.

Her home is separated from the apartments by a garden, and inside was cluttered with the messy ephemera of family life – dishes stacked high in the sink, abandoned glasses, toys and knick-knacks across every surface. I could see an extra pair of hands would be useful.

"You haven't had dinner? Help yourself to some bread and a bit of cheese from the fridge," said Simone, who urges Workaways to help themselves to whatever they like, anytime. After this we drank a bottle of red wine in the moonlight. Being flexible and open-minded is essential to making the Workaway experience a success, explained Simone.

"I email volunteers questions in advance to see whether they will fit in," she says. "Then I try to find jobs for them that make the most of their strengths. One girl came to stay, she was nice, but so slow. It took her two hours to wash up. So I said, what do you like to do? She painted a bit, so I asked her to draw something for the kids. It was brilliant! So I said, forget the paper." Now a huge painting of a reclining Buddha covers a kitchen wall, and almost every room in the house is decorated in her rag-roll effect.

Simone was equally happy with the manual work of her current Workaway, Gage, a graduate from Colorado, who I was dispatched to meet so the family could have quiet time together. He had his own small building at the end of the garden, with a bathroom, desk and double bed where Workaways usually stayed, though in winter when the tourist apartments were available, they stayed in them instead.

Alongside roofing, fencing and gardening, Gage frequently minded the girls, including for three days while Simone went to Germany to research potential schools. Quite a big responsibilty for someone who'd only been there for three weeks, and one I got the impression he wasn't entirely comfortable with. It also sounded like he worked more than five hours a day. But the kids were great, he could borrow the car, had time to study, and was spending weekends travelling in Spain, visiting Seville and Madrid. "Whenever I get out onto the beach," he said, "I remember why I'm here."

Constant negotiation over shift lengths, rewards and duties are obviously necessary for the relationship to work, and there's a chance Workaways could be taken advantage of if ground rules aren't set and gripes voiced. Whether Workaways feel they're getting a good deal depends on their expectations and their perceived value of the work. On one hand, some of the projects, such as monitoring elephants in Sri Lanka, would cost thousands through a gap year operator; on the other, hotels often pay live-in staff a wage for similar duties to Workaway chores.

I certainly felt I was getting a good deal the next day, when after cleaning the kitchen, I spent all day exploring Caños de Meca. Bright flowers poured from hidden gardens over white-washed walls, only cats prowled the pavements, and the roads were deserted but for the odd surfer pedalling past on a bike, knotty hair trailing in the wind.

I bodysurfed warm green sea crests, watching surfers zip across the white ruffles, then sat under a raffia umbrella in a chiringuito with a beer – my sole purchase of the day. This definitely felt like a holiday, and in one of the most beautiful parts of the Spanish coast.

Around 4pm – siesta time on most holidays – my shift started. I'd had no work-dread feelings. After nearly a decade sat in front of a computer screen, washing up, cleaning apartments, making beds, laundry and playing games with the kids didn't seem much of a chore. I usually do these things to unwind after work.

Not everyone loves kids, but for me, hanging out with Faye and San was a pleasure. They were sweet, bright and welcoming, happy to ask questions and practise their English. We played badminton, Faye told me about school and her best friend, and San showed me her pet beetle in his polystyrene box. The endless rounds of Guess Who did wear a little thin but as I'd brought the game to ingratiate myself, I had to swallow the yawns and ask "does he wear glasses?" (or, when I learnt the Spanish, "gafas"), one more time.

A friend of mine came to stay too, which meant we shared the work, and also the fun. I'm sure if I'd been there longer I would have met more locals, but it was helpful to have a mate to visit the local bar with.

One night we borrowed the car to explore Vejer de la Frontera's white Moorish alleys. Around every corner lay perfect scenes; mosaic-tiled courtyards full of flowerpots, a cavernous flamenco hall, the beautiful 14th-century church of Divino Salvador, tiny tapas joints and El Telar de Vejer, a craft workshop where an old woman with bright blue hair weaved rainbow bedspreads on a loom.

One day I hired a surfboard in El Palmar, an even more gorgeous and laid back beach town then Caños. We visited Barbate, a slightly tatty town with a nice beach. "It is a town that is built on drug dealing and tuna fishing," chattered Simone as she drove us over the dry hills, Goan trance blaring from the stereo. "The hash comes in there from Morocco." Illegal immigrants come across the water too, she said.

"You can be put in prison for that," piped up Faye from the back, but Simone just shrugged.

When mum wanted a lie in, getting up in the dark to wake Faye and San for school, cook scrambled eggs, make their lunch, break up a fight and walk them down the road, was tough, but flexible shifts meant we could go back to bed afterwards. And Simone was an inspiring character, a real free spirit. Our time with the family was in some ways more rewarding than our time off. From them we learned about the area, Spanish and expat life and picked up smatterings of the language.

But what I valued most was the healthy outdoor life; eating, drinking and spending less, and swimming in the sea before breakfast. This wasn't really work, it was simply living differently somewhere else, and living better, a much richer experience than a normal holiday.

Near the end of the stay I wanted to do something special that the girls would remember. Simone's face had a slight look of horror when she came home to find us, not cleaning the apartments as instructed, but colouring in decorations and blowing up balloons. After a swift diversion to sweep and make beds, we set to work sourcing mosquito nets, lanterns, floating candles and even an old disco ball we found under a pile of rugs in the summerhouse, to create a fairy wonderland beneath a tree. The fairy party idea wasn't greeted with quite the enthusiasm we'd hoped; Faye tentatively helped hang balloons but just watched us make wings, and San wouldn't even come out of her room to see the wonderland. Perhaps the party was more for our own benefit than anyone else's. But Simone cooked a feast and invited local friends and the apartment guests round, and as the bonfire began to crackle in the fading daylight, San emerged in a pretty fairy dress, magic wand in hand. In the end it was a fantastic party. The kids danced round the fire and we ate and drank Cava and talked until 4am.

As we packed up to leave, Simone hugged us goodbye. "It is so great to have all these different people come, so great for the kids," and she thanked us for bringing "creativity and positive energy" into the family. During our stay, we had spent very little money and earned nothing, but this reward, the gratitude for making a small difference and that we had made new friends and lived a real, local life meant we went home richer.

• This article was amended on 19 October 2009. The original gave the Spanish word for eyeglasses as brilles. This has been corrected.

• Workaway costs €18pp, or €24 for a couple/two friends for two years, enabling you browse hosts for free on the website and arrange placements. To stay with Simone contact her directly . All meals and accommodation are included, plus occasional use of a car.

Accommodation at Casa Meca (0034 639 613 402) costs from €290 per week for a two-bedroom apartment, from €350 sleeping four, open year round.

Monarch (08719 405040) offers year-round flights to Malaga from Birmingham, Gatwick, Luton and Manchester and to Gibraltar from Luton and Manchester from £44.50 rtn inc taxes. Extra-legroom seats are available for £17.50pp each way.