12 Tips On How To Travel Iceland On A Budget

Table of Contents

Iceland is an incredible destination with some of the most beautiful landscapes in the world.

It’s also a very expensive destination, having the 4th-highest cost of living in the world, so it’s not surprising that people often ask, “How can I travel to Iceland on a budget?”.

It’s not impossible at all, it just takes a little work to find the hidden gems.

In this guide, we’ll show you how to travel Iceland on a budget by finding the best things to do, restaurants, as well as little tips and tricks to save money while in Iceland.

1) Stay at an Airbnb in Reykjavik

In Iceland you can do everything from camping and renting a camper van to staying in luxurious 5-star hotels, but the most budget-friendly option would be to book an Airbnb.

Compared to a traditional hotel, you’ll be saving about 20 to 30% of the cost.

2) Go Camping

It is easy to find accommodations in Reykjavik, but it’s nearly impossible to find any if you’re cruising the Highlands or the Ring Road.

Camping is available everywhere in Iceland for as low as $10 USD per night, making it even cheaper than hostels (mixed dorms are about $50 USD per night).

3) Don’t Waste Money on Bottled Water

The water in Iceland is incredibly clean and drinkable, so carry a bottle with you and fill it on the go!

4) Cook Your Own Meals

Food is very expensive in Iceland and if you’re not mindful, costs can easily break the bank.

The best thing to do is to buy your own groceries and cook it at home. Most accommodations will have small kitchens (you might want to contact the place you’re staying at to make sure).

5) Rent a Camper Van

The major benefit of renting a camper is that it covers not only your transportation but also your accommodation. Not only that you can pretty much pull over anywhere and sleep that gives you maximum time to explore Iceland’s incredible panoramas.

6) Hitchhike

Iceland is one of the safest country to hitchhike. It’s easier to hike around in Southern Iceland than less populated Northern Iceland, although it is not impossible either.

Instead of standing on the road to hitch a ride, better chances are if you ask in the hostel, guesthouse or campsite. Most people will be driving on the main road.

If you are a solo traveler, hitchhiking is a good option to save money.

7) Share a Rental Car

If you are traveling in a group, the best way to travel on a budget is to rent a car and share the cost. It will cost you on an average $70/day.

Split that cost if it’s four of you and it wouldn’t be hard on the pocket.

It gives you flexibility to stop anywhere on the road unlike hitchhiking or a group tour. Driving is the best way to explore Iceland’s beauty.

8) Fill Your Itinerary With Free Activities

Blue Lagoon $80, Glacier Hiking $300, Ice Cave Tour $300, Silfra Diving $ 450, Horse Riding $300. Yes, tours in Iceland are as expensive as accommodation and food.

But there are tons of attractions that are stunning and free of cost like Jökulsárlón Lagoon, Seljalandsfoss Waterfall, Thórsmörk Valley, Geysir, Skaftafell National Park and so on.

9) Shop From Budget Supermarkets

Small supermarkets could get quite expensive (like a pack of Doritos $8, a cold sandwich $12). That’s why we would highly recommend you to stock up whenever you find a big supermarket chain like Bonus and Kronan around you.

10) Munch on Hot Dogs

If you are cannot cook your own food and you are done eating salads, fruits and bars, another option for cheap eats is trying the famous Icelandic hot dogs topped with mustard, ketchup and onions, which cost under $3 at any petrol station.

11) Bring Your Own Sheets

Like many Scandinavian countries, many hostels in Iceland charge $10 for bed sheets and comforter. If possible try bringing in your own sleeping bag or bedsheet.

12) Book In Advance

Be it renting a car, buying car insurance or getting a tour, try to book most of the things in advance. Turning up in Iceland without pre-booking is likely to cost you an arm and a leg.