Iceland is known for its stunning landscapes, northern lights, and volcanic activity. But it also has a reputation for being expensive. Fortunately, traveling to Iceland on a budget is possible. With a few simple tips and tricks, you can experience everything this beautiful country has to offer without emptying your wallet.
Accommodation
Accommodation can easily be the biggest expense of your trip. But, it doesn’t have to be. Here are some ways to save on a place to stay.
Stay in Hostels
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Iceland has many affordable hostels. They’re not just for backpackers either; hostels in Iceland tend to be clean and comfortable. Some even offer private rooms. Hosteling International operates many of the hostels around the country, and you can save more if you have their membership.
Camp or Rent a Camper Van
A great alternative to hostels and hotels is camping. If you’re into the outdoors, bring a tent or rent camping gear. Iceland has over 170 registered campsites. Sleeping in a tent is one of the cheapest options and costs around 10-20 USD per night. This way, you can stay close to nature while keeping costs down.
If you’re not the tent type of person, renting a campervan combines accommodation and transportation. You can park at designated campsites and wake up to some of the country’s most scenic landscapes.
Use Airbnb
Airbnb is another good option. Many Icelanders rent out rooms or small apartments. You can find budget-friendly stays, especially if you’re booking well in advance. Sometimes, staying in a local’s home is much cheaper than hotels or even hostels.
Food
Food prices in Iceland can be shockingly high. But you don’t need to spend a fortune on eating out every day.
Shop at Grocery Stores
One of the best ways to save on food is by shopping at the local grocery stores. Bonus, Netto, and Kronan are the main supermarkets in Iceland. They’re affordable compared to dining out. Stocking up on groceries, cooking your own meals, and making sandwiches for on-the-go meals can save you a lot of money.
Bring Your Own Snacks
Another option is to bring non-perishable snacks with you from home. Protein bars, nuts, and other easy-to-carry food items will help keep your costs down when you’re exploring the more touristy and expensive areas.
Avoid Dining Out Frequently
If you do want to try some local food, I recommend limiting your dining out experiences to maybe once or twice during your trip. Stick to casual or budget-friendly restaurants or bakeries instead of fine dining options.
Transportation
Getting around Iceland can be expensive if you don’t plan properly. Luckily, there are some ways to make transportation costs more manageable.
Use Public Transport in Reykjavik
If you’re staying in Reykjavik, you can get around the city with the public bus system. It’s cheap compared to taxis or rental cars. The city is also pretty compact, so you can walk to many attractions.
Rent a Car
If you’re venturing outside of the capital, renting a car can be more cost-effective than organized tours. Look for deals on rental platforms and consider renting an economy car to save on fuel. Keep in mind that gas prices are high, so factor that into your budget.
Carpool with Other Travelers
If you’re solo or part of a small group, consider sharing the cost of a car rental with other travelers. You can often find others in hostels or via travel groups. This can reduce the overall cost significantly.
Attractions
Many of Iceland’s highlights are its natural attractions—and nature is free. You don’t need to spend a lot if you focus on the right activities.
Visit Waterfalls and National Parks
Iceland is home to some stunning waterfalls like Seljalandsfoss and Skógafoss, and they’re completely free to visit. The country’s national parks, such as Þingvellir, are also free for visitors. Bring a camera, pack some food, and spend a whole day marveling at the beauty that surrounds you.
Do Free Walking Tours
Reykjavik offers free walking tours where you can get a local’s perspective on the city’s history and culture. Although the tour is free, tipping your guide is encouraged and worth the experience.
Skip Expensive Tours
Some attractions, like glacier hiking or whale watching, can be quite pricey. If you’re on a strict budget, you might want to skip these activities and focus on free or low-cost alternatives. For example, you can see whales from the shore in certain areas, or hike in free parks without paying for a guide.
Visit the Geothermal Pools
The Blue Lagoon is incredible but expensive. Luckily, there are several cheaper alternatives. For example, the Secret Lagoon or Reykjadalur Hot Springs are much more affordable. Even Reykjavik has public geothermal pools that are affordable compared to the tourist-heavy Blue Lagoon.
Budget-Friendly Destinations in Iceland
If you’re planning to explore beyond Reykjavik, there are a few budget-friendly areas worth your time.
The Golden Circle
The Golden Circle is one of the most popular tourist routes. It includes Þingvellir National Park, Gullfoss Waterfall, and the Geysir Geothermal Area. All these sights sit within a short drive from Reykjavik and can easily be done in a day with minimal expense.
Akureyri
Akureyri is the second-largest city in Iceland and a great base for exploring the northern part of the country. It’s less touristy than Reykjavik and offers hiking, hot springs, and stunning nature without the crowds.
The South Coast
Driving along the south coast will give you access to some of the most awe-inspiring landscapes in the country: black sand beaches, glaciers, and waterfalls. The drive itself is free, and there’s plenty to see and do without spending too much money.
Extra Tips for Saving Money
Book in Advance
Iceland is a popular destination, and prices can rise fast during peak season (summer). Booking accommodation, car rentals, and flights in advance can secure you cheaper rates.
Travel in the Off-Season
If your schedule allows, plan your trip during Iceland’s off-season. That’s typically from November to March. You’ll find lower prices on everything—from flights to hotels—and fewer tourists at major sights.
Stick to Budget Airlines
When booking flights to Iceland, use budget airlines like Play and Wizz Air. These airlines often have affordable fares. Just be mindful of extra fees for checked bags to keep your overall costs low.
Skip Bottled Water
Iceland has some of the cleanest tap water in the world. Bring a reusable bottle and skip buying bottled water. You’re not only saving money but also helping protect the environment.
Free Wi-Fi Everywhere
Don’t buy a local SIM unless you need data for something specific. Wi-Fi is available almost everywhere in Iceland, including cafes, restaurants, and even some campgrounds. Save on roaming charges by using free Wi-Fi when possible.
Traveling to Iceland on a budget isn’t impossible—and it doesn’t mean you’ll miss out on what makes this country so incredible. With some planning and smart budgeting, you can experience Iceland without breaking the bank. Whether it’s staying in hostels, cooking your own meals, or enjoying the myriad free outdoor activities, you’ll leave with lasting memories and money in your wallet.
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