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I have a newbie question here. When you setup a Tor hidden service do you yourself use up bandwidth on your network or does is the traffic attributed to the relay?

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By your network you mean the local network? It is true that Tor hidden services are mapped to a port on 127.0.0.1, but that port is mapped to a Tor relay node. That means the connections arrivinng to your hidden services will appear as coming from 127.0.0.1, but in the fact they're comming from the relay node, and vice versa. So the traffic will appear as a loopback or local traffic, but in reality it is a traffic with the outside network like a normal (non-hidden) service would consume.

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When you set up a hidden service it is bound to some service (web server, chat server etc.). This server sits on your computer inside your network. So if someone connects to your hidden service, it connects over Tor to your service. All traffic which goes back and forth goes through your network and so uses your bandwidth.

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