Doing Iceland on a budget isn’t easy. But as broke backpackers making our way round the country for a week, out of necessity we were able to find a few creative ways to get more bang for our buck… And we only starved ourself a little bit didn’t even have to starve ourselves. We went in winter, too, so it was an extra challenge.
I’m honestly not sure I’ve been anywhere more expensive than this country. A few have come close, but I have definitely laughed out loud at more prices in Iceland than anywhere else. $20 for a crappy pre-made sandwich? Yeah, nah. Cocktails for $21? Hmmm, that’s gonna be a no from me, dawg.
I think food is the real killer in Iceland, with meals from $20 onwards, generally around $30. But food is also the most avoidable expense with proper preparation.
You can’t avoid expenses like transportation and accommodation of course (unless you camp in the summer) but these can also be lessened if you plan out well and don’t mind a bit of sharing with other travelers. You can even check out some unique hotels + stays in Iceland while on a budget if you plan ahead.
Iceland on a budget is all about sharing, splitting costs, considering everything you need to know before you go, and finding ways to finagle your way around other expenses. Allow me to explain further:
Top Tips for Iceland on a Budget – Saving on Rental Cars, Accommodation, etc
If you travel with more people, you can naturally split more costs together. This way you can share a rental car and not pay a high price for tours, and potentially share apartments or B&B’s together as well (which can sometimes be cheaper than even the cheapest hostel!).
If you are wondering where to stay in Reykjavik, there are a few great hostels or hotels you can share with others. Because most cars can fit five people, I think that is the optimal amount because costs will go up if you rent a second car. Filling up our rental car with 5 people was possibly one of our best moves!
If you are traveling solo I’m sure it would be fairly doable to link up with a few others at a hostel and split costs together – everyone is in the same boat here looking to do Iceland on a budget! Check out a full Iceland budget breakdown here, with costs and all.
Eating in Iceland on a Budget: Tips to Save on Food
BRING SNACKS.
Bring absolutely as many snacks as you can fit in your suitcase/backpack, and survive on them. I filled my entire carry-on with trail mixes, balance/muesli/granola bars, dried fruit, chocolates, chips, and anything else I could scavenge from my house, and so did my friends.
We brought oatmeal packets, tea bags, and instant coffee, and used all of the above throughout so much of our trip that it actually replaced many potentially costly meals during our Iceland itinerary.
We had a big snack bag in our rental car that was always floating around between us, and was able to sustain us through a lot of our trip!
Cook / Shop for Groceries
Although pretty much everything is expensive, you can still find some groceries that are very affordable once split between groups. We got $1 pasta bags, some sauce, and veggies, and made ourselves some pretty damn good pasta dinners in our B&B.
For lunch, we got peanut butter, jelly, and bread, and this was completely fine for lunch along with the snacks we already brought.
As for breakfasts, we either found accommodation that came with free breakfast, had some coffee, or one of the oatmeal packets we brought from home! Boom – Food in Iceland on a budget.
Read More: A Trip to the Penis Museum in Iceland We Cannot Unsee
Saving Money By Finagling Things for a Cheap Iceland Trip
Icelandic Coffee Trick
When you buy coffee in Iceland, you generally get a tiny little cup and fill it up yourself at one of those espresso machines where you press a button for the variation of coffee you want and it fills up your cup. You can expect to pay $4-$6 for this (I know), and it doesn’t usually even fill your minuscule little cup all the way up. BUT, to get more bang for your buck, fill your cup with a normal cappa/latte/etc, and then add an extra shot of espresso on top. Boom.
I have also re-used my tiny cups in different places because many allow a refill (or won’t notice if you just fill your cup up real quick). This extra caffeine can also put off some hunger! 😉
Water = Free
Bring your own reusable water bottle (!!!) and drink from the tap (most amazing cold glacier water). No need to purchase any water if you are on top of this!
Planning Tours in Iceland
Depending on what you want to do, splurging on a tour (e.g. Ice caves, northern lights, etc) can be one of the most expensive things you do in Iceland. Something to remember, though, is to make absolutely sure that what you are paying the our for, isn’t something you can do yourself (or that it is worth the extra money to have someone else do for you).
Some things are unavoidable, but certain things like seeing a glacier and finding the northern lights are actually very do-able solo – just research online and use common sense!
Some of the best things to do in Iceland are tours, but remember to be smart about it. Going to Iceland at the best time to see the Northern Lights will also help your chances of finding them on your own.
All these tours have a specific element that would be unattainable on your own – like massive 4WD to cross tundra, snowmobiles, a boat, knowledge of certain locations, or actual horses. Other than these, you can do the Golden Circle, Blue Lagoon, Secret Lagoon, Vik, Airplane, Glacier Lagoon, most waterfalls, searching for the Northern Lights, and any/all driving tours pretty much on your own if you rent a car.
All these are also available as tours if you wish, as well. It depends what you want; we decided we would splurge on one ice cave tour because we were doing Iceland on a budget but still trying to do cool stuff. I wish we could have done more – especially the Silfra Fissure – but again, it depends on you!
Festivals in Iceland
Mkaaaaay, you can’t really do Iceland on a budget at these festivals. But if you’re a festie lover like me, you’re going to have extreme fomo if there’s one going on while you are there. So, check for festivals ahead of time (there are surprisingly a lot!!) and grab early bird tickets, or tickets for the cheaper days.
Around when I went was Sonar Reykjavik, which looked bloody awesome, and was held at their amazing convention center, Harpa (there’s a photo of Harpa somewhere around here!)
If you are going over summer, PLEASE do me a favor and go to Secret Solstice. PLEASEEEE. For me and my fomo-ridden self who will be at work. It’s held over the summer solstice and the sun never goes down. HOW. COOL. IS. THAT. Okay sorry, as you know, festivals get me excited.
Best Time to Visit Iceland on a Budget: Travel in Low Season
Yes, it is cold in winter, but isn’t that what you expect from Iceland?! Winter is great because prices are lower, there’s a better chance of seeing the northern lights, and it’s less crowded. We were there in February and were surprised that there was completely ample daylight (almost 9 hours) and the temperatures were more than bearable!
You really can get a lot done in a 4-Day Iceland itinerary, especially at this time of year – exploring the capital and some spots around it too.
Iceland on a Budget: Saving on Accommodation
Camping – The cheapest way to live in Iceland is definitely camping – unless you’re there in winter like we were.
Hostels are naturally the cheapest option depending on where you stay and what size of room you choose, and if you’re traveling solo. We stayed at Kex Hostel and loved it! However, since we were road tripping, we had to find accom in other places as well. I always book mine on Hostelworld, and have never had less than an amazing experience.
B&B’s – If you have a larger group it might even be more affordable to split apartments or B&B’s – we found some great places on Airbnb that we loved.
Free Breakfast – Again, try to find accommodation that comes with free breakfast. This may seem like a given in mainland Europe, but it will actually save you LOTS in Iceland as even hostel breakfasts can cost $15-20.
Book in advance – Another important thing to note is to book your accom far in advance. We slacked off a bit too much and a lot of our options were booked out (even in February!) when we got around to it.
Sleeping bags – We didn’t actually have to do this, but many places in Iceland offer a discount if you sleep in your sleeping bags and don’t have to soil their sheets. Look at the websites of your accommodation and see what they offer! This is most popular in summer, and you can get sleeping bags for as little as $20.
Tips to Save On Drinks in Iceland on a Budget
Buy your Alcohol in Duty Free. DO IT.
Before you exit the airport in Iceland, get alcohol there for your entire trip. Or bring some with you from wherever you’re coming from. Its much, much cheaper this way.
Also, all shops that sell alcohol in Iceland close at 6 so if you end up needing more, you’ll have to go before 6. But really, get multiple bottles of whatever-it-is in the airport if you like to drink, just in case. I recommend the classic Icelandic spirit, Aquavit.
Get the app “Appy Hour” for Reykjavik
A few people had to tell me about this before I actually did it, but this app is SMART. You open it up and it gives you the hours and locations of all Reykjavik’s happy hours, with all its happy hour deals and a small blurb about the bar. It lists the standard price for a large beer and the hours of the happy hour, so you can literally hop around on $5 beers all night IN REYKJAVIK… Which is actually insane.
Iceland on a Budget: Saving on Flights
Assuming you’re flying with WOW or some other equally affordable airline, your flights are going to be the least of your worries when it comes to Icelandic expenses.
We got flights for $400RT from LAX, with a ‘large carry on bag’ (not large at all) for $50 each way… so $500 total. Which, in terms of flights to and from Europe, is a fantastic price. Make sure you check Skyscanner for the best rates.
WOW Air Info
Unfortunately WOW Air went under in 2019 but hopefully there will be more budget providers with service to Iceland!
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