How to Visit Iceland on a Budget
Are you planning to explore Iceland on a budget? What are the best ways to cut your travel expenses while there? These essential money-saving tips will help you make the most of your trip to Iceland, even if you're traveling on a tight budget.
Iceland is known for two things. Firstly, for absolutely breathtaking scenery and abundance of top natural attractions. Secondly, for being a super-expensive country, even for the European standards.
After traveling the country for two weeks, we must confirm it is not easy to visit Iceland on a budget.
But we tried, like many travelers before us. And we believe our attempts were quite fruitful.
Before we start, you should also read our more detailed post on our Iceland travel budget, where we share how much we spent in the Land of Ice and Fire. It will help you to see the bigger picture.
Even though we almost always opted for the more affordable alternative available, our total bill for this road trip was much higher than what we usually spent in cheap destinations in the same amount of time.
Simply put, travel expenses in Iceland for a rental car, accommodation, tours, food, gas, and other services are pretty high.
Please do not take us wrong. The trip to Iceland was worth every penny, but who does not like saving money on the road?
You may be wondering if it is possible to plan a cheap(ish) trip to Iceland?
Our answer would be yes, especially if you know what to expect.
However, the meaning of this term is a bit different in this beautiful European country, and it is probably better to rephrase traveling Iceland on a budget to traveling Iceland as cheap as possible.
So, after fourteen days on the road, we are happy to share with you our personally tried and tested tips on how to save money in Iceland.
At first sight, every tip might seem like a small step. But if you put them all together and focus on your daily expenses, they can actually save you a fortune.
Moreover, we believe it never hurts anyone to use a few money-saving tricks - think about it as an investment for your future trip - regardless of your travel budget.
Without further ado, here are our Iceland budget tips if you want to get the most out of your trip.
Iceland on a Budget
Saving money on an Iceland trip is a long process that starts as early as you begin planning your holiday.
If you really want to explore this country on a budget, it is essential to realize that many things need to be booked or purchased in advance while you're still at home.
As tourism has been booming in this country lately, it is essential to book most of the services well in advance.
This simple yet efficient trick can save you a couple of hundred dollars even before you even leave the comfort of your home.
Then, you have things that you can affect while already on the road.
You do not have to live 100% frugally, but it is good to know that a few visits to the restaurant or nights in a nice hotel can ruin your efforts.
Therefore be mentally prepared that if you want to save money on your trip, you must think about every single purchase.
Luckily, the most important part of Iceland is free of charge - the incredible scenery.
Without any further ado, here's our list of money-saving tips.
By implementing at least a few of them, we promise you'll enjoy traveling Iceland, and your travel budget may be much lower than you had planned.
Cook Your Own Food
From our experience, it is tough to travel around Iceland on a budget without preparing your own food. Quite frankly, it's almost impossible.
Eating in restaurants is super-expensive in Iceland. Therefore, this tip is one of the most important ones.
Avoid eating out if you want to save money on your Iceland trip.
We realize it sounds too strict, but hear us out.
The basic one-course menu can cost anything between 30 and 45 USD, while you spend approximately 15 USD for a snack.
We think it is pretty expensive if you eat like this three times a day for a week or two.
As we traveled in a campervan, it was pretty obvious that we would cook every meal. We already had experience from road tripping Canada or New Zealand, so we knew what to expect.
We cooked very simple meals such as muesli, pasta, eggs, rice, beans in tomato sauce, ate vegetables and fruits, bread and cheese, drank either water or made a hot tea.
Yes, our shopping list was not somehow splendid. But we knew we were not visiting Lima.
Still, we spent two or three times more on groceries than what we're used to in the Czech Republic when compared to the same amount of time. And we ate much more frugally.
Now, we put this saving tip in context.
Groceries are not cheap in Iceland. But buying groceries is still way more affordable than eating out in Iceland.
To be even more effective, shop in the cheapest grocery stores - Bonus, Kronan, or Netto.
Camping is Cheaper Than Hotels
Finding a cheap hotel room in Iceland can be very tricky, if not impossible.
Even hostel rooms with shared bathrooms are costly, at least much more expensive than we are used to in cheap countries.
And it does not come as a surprise that most of the cheaper rooms are booked out several months in advance.
If you do not book your accommodation in advance, you might end up paying an outrageous price in your desired destination or get a high rate for a remote place far away from the point of your interest.
If you are still working on your perfect Iceland itinerary or you do not feel comfortable booking all services that long in advance, consider camping.
Firstly, we have to say that camping in Iceland is fun. It was also cheap.
And while it is not possible to book a spot at a campground, you should always find an available space regardless of your location.
Whether you decide to sleep in a tent or a campervan, a night in a campground will cost you anything between 10 - 15 USD per person, which is a lot less than what you would pay for a hotel room.
Of course, camping might be challenging outside the summer and shoulder season, but that's another story.
Remember that it is no longer possible to call it a day anywhere you want, that's why it is compulsory to find a campsite to protect Iceland's nature.
Yes, free camping is not allowed in Iceland.
Fortunately, the campsite network is extensive, and campgrounds are cheap.
Don't forget that some of the campsites are only seasonal.
Travel in Shoulder Season
It is not breaking news that every travel destination is cheaper outside the peak season.
So it is still surprising that most people decide to travel in the busiest months, despite this well-known fact.
And yes, we get it. Everyone wants to get the best weather possible while on vacation.
But shoulder season usually offers fairly similar weather conditions (weather might be a bit colder), while the prices are significantly lower.
This money-saving tip applies to Iceland as well.
June to August are super-busy, the parking lots near the top attractions are packed, trails are crowded, and tourists are everywhere.
More importantly, cheap hotel rooms, inexpensive rental cars, or affordable campervans are gone.
Not to mention that the starting price for everything that's still available is still much higher than in the shoulder season.
Therefore, traveling to Iceland during the shoulder season is a win-win tip if you want to save money and avoid crowds.
April and May and September and October are months worth considering for your journey.
These months still offer pleasant weather conditions, most of the visitors left by now, room rates are lower, and there are more cars and campervans you can choose from.
Still, do not expect to have the Ring Road entirely for yourself, as budget travelers think alike.
And why not visit Iceland in the off-season?
Winter in Iceland is harsh, days are super short, and the whole experience is not very tourist-friendly.
We would avoid winter unless you want to see the Northern Lights.
Read our post on the best time to visit Iceland for more information.
Drink Tap Water
Iceland is famous for its clean and plentiful drinking water. Therefore, travelers do not have to buy plastic bottled water.
Tap water is drinkable, the same as water from almost every stream. Most of the streams and rivers in Iceland run directly from a glacier.
There's absolutely no need to buy water in a grocery store while in Iceland.
And if you are able to avoid soft drinks for a week or two, this tip can easily help you save a significant amount of money.
Plus, we don't have to mention the positive impact you'll have on the environment.
The only thing you need is to bring your own water bottle.
We have been using this one ourselves for years and cannot praise it enough as it is indestructible and great for rough conditions on the road.
In a nutshell, drinking tap water has two levels.
First of all, you save money, but most importantly, by avoiding single-use plastic bottles, you behave as a responsible traveler and set an example for others.
Avoid Alcohol
Alcohol is another item that is very expensive in Iceland.
If you can, we highly recommend avoiding alcohol entirely during your trip.
Taxes on alcohol are incredibly high in this country, and the more percentage of alcohol the drink has, the higher your total bill will be.
Beer costs between 8 and 10 USD, and for us, it did not make sense to buy any. Plus, we wanted to stay sober to remember what we'd just seen.
As we wanted to keep our Iceland budget to a minimum, it was not a problem to consume alcohol for us here.
If you enjoy relaxing with a drink in your hand, you can either consider this trip as a short detox or adjust your budget accordingly.
The cheapest alcohol in Iceland is at the airport as it is duty-free.
It was easy to see that alcohol is a treat in this country as many locals took advantage of buying a bottle or two while there.
Also, note that alcohol is sold in specialized liquor stores in Iceland, not in regular grocery stores.
Visit Free Hot Pools
It is impossible to visit Iceland and not take a dip in at least one hot pool.
Iceland is a cold country regardless of the season, but it boasts plenty of hot springs and pools. Some of them are luxurious and expensive, while some are free.
So if you're a budget traveler looking for a great way to lower your travel expenses, visit free or cheap hot pools in Iceland.
The hot pool culture has a strong tradition in Iceland, and every day you can find a place to relax without breaking the bank.
We have to admit that the most famous and luxurious spa-like hot pools such as Blue Lagoon or Myvatn Baths are amazing.
And the experience is well worth the money, so don't be afraid to splurge a few times during your trip.
But if your budget is really tight, consider instead visiting places such as Hofsos Infinity Hot Pool, where the entrance fee is only 1000 ISK.
Or even better, visit free Iceland hot pools like Djupavogskorin Geothermal Pool in East Fjords or Hellulaug Hot Pools in Westfjords.
These hot pools are very basic and intimate, but maybe thanks to their natural charm, we liked them the most.
And they offer one of the best ways to socialize with other fellow travelers and locals.
Of course, there are many more places with hot springs that are free, such as Reykjadalur Hot Springs River, but, for obvious reasons, we were in two weeks able to visit only a fraction of them.
If you are a hot pool lover and want to take a dip every day in Iceland, google sites dedicated only to Iceland's top hot pools.
Travel Insurance
It might seem off-topic, but we are convinced that sometimes you need to make a small investment in order to save a lot of money.
Travel insurance is often discussed whether it's worth it or not.
In our opinion is that if you cannot afford travel insurance, you should not travel at all.
It is as simple as that.
Medical care in a foreign country can get extremely expensive and put you in debt for life, especially in a country like Iceland, where everything is two or three times more expensive.
World Nomads provides travel insurance for travelers to cover their trip essentials, including sports and adventure activities.
SafetyWing is affordable travel insurance for backpackers, long-term travelers, and digital nomads.
Travel smarter and safer!
Share the Cost of Travel
One of the best money-saving tips to keep your Iceland travel budget as low as possible is to share the cost with other travelers.
You can bring your family, a group of friends, or even find a fellow traveler in a hostel in Reykjavik who is willing to join you on your journey.
This strategy will help you to keep your expenses to a minimum.
You can share the cost of a rental car, fuel, cook together, or stay in the same room - all of that can save you a lot of money.
What is the most important thing?
No matter how much you want to keep your budget low, make sure that you are able to spend the next seven to fourteen days (or even longer) with your companions.
This step is even more crucial to consider if you've just met that person.
Saving money is one thing, but you want to enjoy the trip in the first place.
Enjoy Nature and Look for Free Things to Do
We realize that hearing all the time that a country you want to visit is expensive might be disheartening for some of you.
We definitely do not want to sound negative, and we do not want to discourage you from visiting this wonderful country.
Rather the opposite.
We want to show you that where's a will, there's a way.
Yes, many things in Iceland are expensive. But not the main highlight and the main reason why many travelers have this country on their bucket list.
We're talking about nature.
In order to keep your budget low, stick to the top free natural attractions.
Only a fraction of attractions such as Seljalandsfoss or Thingvellir National Park are not completely free - here you have to pay a reasonable fee, and it is not even for the entrance but the parking.
Iceland is famous for its beautiful landscape - waterfalls, beaches, glaciers, lagoons, mountains, volcanoes, and even fauna.
There are so many things you can do on a budget while there.
Visit Iceland's second-highest waterfall on Glymur Hike, photograph puffins at Borgarfjordur Eystri, drive around Diamond Circle in Northern Iceland, explore the Lake Myvatn area, and we could go on and on.
Spend as much time as you can outdoors and enjoy nature at its very best.
Visit Reykjanes Peninsula, Snaefellsnes Peninsula, or Westfjords. Your options are almost endless.
In fact, Reykjavik is the only place where you need to pay for admission more often as there are many museums and galleries.
Still, there are plenty of free things to do in Iceland's capital city, so get inspired by this post What to do in Reykjavik.
Travel Indepenendetly
We prefer to travel without a tour whenever it's possible. It has been our travel style for a long time, and we believe that it is a favorite travel style of most of our readers.
Often this way of travel is more challenging, but in our opinion, also more rewarding.
Iceland is one of those countries where your ability to travel independently definitely pays off.
Taking a tour of Iceland is not a bad idea. You don't have to arrange your transport while being able to see plenty of the top attractions.
However, the prices are significantly higher than when you visit a place yourself.
Sure, it is not that comfortable, but you save a lot of money.
Of course, a few things are not possible to arrange just by yourself.
Iceland is one of the best whale-watching destinations in the world, and to see whales in their natural habitat, you must take a tour.
We took a whale watching tour in Husavik, and it was one of the best experiences we had in Iceland.
Simply put, it was money well spent, even though we wouldn't call it a budget-friendly thing to do.
So if you travel on a low budget, you can skip this activity and instead find a wonderful place that lies off the beaten path and, more importantly, is free.
Be Flexible
Do you want to learn one of the best secrets of budget traveling? It's simple, be flexible.
If you do not have an exact date in mind and can afford to take a vacation whenever you want, it gives you the advantage to secure the best deals on flight tickets, rental cars, or accommodation.
Register yourself on websites that offer cheap flight tickets and receive the best offers straight in your mailbox.
Or check the best deals every day or two yourself. We are pretty sure a tempting offer will appear soon.
Then you just need to be prepared to pack your things and be ready to set off right away to get the advantage of these time-limited offers.
As mentioned earlier in this article, this strategy works very well when combined with traveling in the shoulder season, although it's not feasible for everyone.
Find the Best Way to Get From the Airport
Sometimes, it is worth taking a moment and thinking about small details, such as getting from or to the airport.
It might seem like a triviality, but choosing the best way to get from Keflavik International Airport to Reykjavik and vice versa might save you a lot of money.
Keflavik is almost an hour's drive from Reykjavik, and the transport can get pretty expensive.
Taxi can cost between 120 and 200 USD, which does not sound like a budget-friendly way of transport.
We are often surprised by how many travelers usually forget to find information on how to get from the airport and then end up paying much more as they do not know cheaper alternatives.
It is basically the first thing that awaits you in a foreign country once you step outside the airport terminal.
Not having a clue how to get from the airport can add a few hundred dollars to your total bill, especially in expensive countries such as Iceland.
As the public transport from the airport to Reykjavik is not exactly convenient, it made sense for us to book a Flybus Shuttle Bus that took us to the city for 25 USD.
If you're renting a car, make sure that you know the pick-up location as not every company has its offices directly at the airport.
It might be tempting to eliminate this expense if your rental company has an office at the airport.
However, do not choose your rental company solely for this benefit.
Some rental companies also offer a pick up at the airport within their office hours, so explore this option as well.
Book Ahead of Time
Iceland is one of those countries where it pays off to explore your options at least six months before your trip.
In order to save money, plan a realistic travel itinerary and reserve services and products straight away.
The demand is huge, especially if you want to arrive in Iceland between June and August.
And the best deals, no matter if we talk about accommodation, rental cars, or tours, are often booked out.
We know you might be reluctant to reserve anything well in advance, but most services today offer a good cancellation policy.
Yes, it is a bit more expensive than the non-refundable rates, but you will secure a car or accommodation and still have the flexibility to cancel the booking if your plans change.
Always make sure you are aware of individual cancellation policies.
The biggest problem is usually with flight tickets that generally cannot be canceled or changed without buying a much more expensive package.
But when it comes to other services, we recommend reserving them several months in advance to avoid disappointment.
If you are confident that your plans will remain the same, make a decision and book your selected hotel straight away, especially if it has an excellent location/quality/price ratio.
For accommodation, we usually search Booking.com or Hostelworld.
For cars, we use Rentalcars.com, which compares most rental companies and their products.
Pack Smart
This budget tip has two levels. One has nothing to do with saving money, while the other can significantly affect the overall cost.
Let's talk about the first one shortly. Iceland is well-known for its ever-changing weather.
It does not matter when you decide to travel to Iceland. Make sure you pack a bit of everything to stay dry and warm.
You can experience four seasons in one day, that's why you should not underestimate what you decide to bring with you.
More is sometimes better, and you should have a couple of functional t-shirts, a fleece jacket , down jacket, windbreaker, rain jacket, rain poncho, and rain pants.
For more details and tips, read our Iceland packing list.
That brings us to the other thing that is closely connected to money-saving tips.
Try to create your packing list before departure and make sure you do not forget anything at home.
Also, check that everything you pack is in good condition.
Buying new outdoor clothes in Iceland is extremely expensive, and as it can be easily avoided, it would be a shame to spend more money than necessary on things you can bring from your home.
Decide on Transportation
Transportation often costs more money than most travelers realize, and it can quickly become one of your travel expenses. So you can either save or spend a lot of money on transport.
There are several options, so choose the one that fits your travel style and budget.
The cheapest way to get around Iceland is hitchhiking, but honestly, we do not think it is worth it.
This is your well-deserved vacation, and we believe you want to see the best Iceland has to offer in a week or two, right?
We have experience of hitchhiking in Patagonia.
Sometimes it took over two hours to hitch a ride. Sometimes it took longer. And in the end, we ended up on a public bus instead.
We did travel long-term back then, but only of fraction of travelers can afford that.
We did not see many hitchhikers in Iceland and think there are many reasons why.
Firstly, waiting for a lift for hours while standing on the sideroad in the wind and rain is uncomfortable, a situation that is not rare in Iceland.
Secondly, most campervans and cars are already full, which lowers the chance of being picked up. For example, our campervan was a two-seater, so there was no legal room for a hitchhiker.
Lastly, Iceland is a perfect destination for a road trip.
Sometimes there are five or more stops along the way, and unless there was someone willing to drive you the whole day, you would have to find a new ride at each stop, which would be extremely time-consuming.
This option is feasible only for travelers with an extremely low budget and plenty of time.
Then there's the case of public transport.
Buses do run around Iceland but stop only in towns or cities, so in our opinion, you would miss many essential top attractions along the way.
It might be acceptable to get an idea of how the country looks, but still, we think it is better to pay a bit more to be the boss of your itinerary.
Therefore, we believe that the best option to get around the country is to rent a car or campervan.
We opted for a 2WD campervan, the small one, without a heater and with a manual transmission.
Thanks to it, we saw as many places as we wanted, and we could stay at campsites which saved us a lot of money.
All other options are slightly expensive unless you rent a regular car and sleep in a tent.
The rule of thumb is that a bigger car or campervan is more expensive, and you will also pay more for automatic transmission or an all-wheel drive.
Enjoy the Trip
Hopefully, some of these tips on saving money when exploring Iceland should help you keep your travel budget as low as possible.
We think it is always good to know as many ways to save money as possible, but it does not mean you must follow all the steps. Follow only those that make sense for you.
A trip to Iceland is a once-in-a-lifetime opportunity for many people, and the most important thing is to have a good time.
And it is absolutely fine to splurge from time to time on activities you want to try.
We took the fairly expensive whale watching tour and didn't regret that we paid more money than we are used to.
You can go snorkeling at Silfra Fissure, hike to the Fagradalsfjall Volcano, hire a campervan with heating, or stay in a luxury The Retreat at Blue Lagoon Iceland.
The point is to have fun and enjoy your vacation. And if you save some money through budgeting, that's even better.
Travel Resources
Here you can find links to all the travel resources we use and which you might find helpful when planning your next holiday.
Accommodation: When looking for accommodation, we usually search hotels via Booking.com or Hostelworld.
Tours: Although we love to travel independently, some places are better to visit with a guided tour.
We prefer GetYourGuide for its easy-to-use interface and solid reputation. Another great alternative is Viator.
Rental Cars: When going on a road trip, we always use Rentalcars.com, a reliable site for booking a rental car in advance.
Flight Tickets: When looking for flight tickets, you can search Skyscanner to find the best price.
Travel Insurance: World Nomads and SafetyWing cover against risks of travel.
