Iceland is the most stunning country we have been to, but also the most expensive one. It has the fifth highest cost of living in the world, but that shouldn’t stop you from visiting such an incredible country. After 2 weeks of exploring the country, we can tell you Iceland can be done without breaking the bank.
Read our guide on ” Top 20 Things To Do In Iceland“
Here are 13 tips on how to do Iceland on a budget
1) Stay In Airbnb’s In Reykjavik
We love staying in Airbnb’s. In our experience, Airbnb cost is always 20 to 30% cheaper than staying in hotel/hostel without compromising on the quality.
In Reykjavik we stayed in Airbnb at $30/person/day.
It is easy to find Airbnb in Reykjavik, but it will be impossible to find it while driving in the highlands or even the Ring Road for that matter. Camping is available everywhere in Iceland for as low as $10/ night. Camping is way cheaper than hostel too because in remote location even a mixed dorm will cost you $50/ person. Moreover, if you want to save more money you can camp anywhere into the wild and not pay any fees. As long as, it doesn’t say “camping not allowed”, it is completely legal.
3) Drink Tap Or River Water
Water in Iceland is incredibly clean and drinkable. We highly recommend you to carry a water bottle and fill it on the go.
Read our guide on ” 17 Reasons To Travel To Iceland”
4) Cook Your Own Food
Food is another thing that is very expensive in Iceland. Eating out even on budget can cost you minimum $15. It’s easy for your food cost to go through the roof at those prices.
Best thing to save money is to buy grocery and cook your own food. All guesthouses, hostels, campsites in Iceland have got a kitchen.
5) Hire A Camper
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.
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 travelling in a group, best way to travel on 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) Do 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.
If you don’t want to spend $80 in the Blue Lagoon, here is the list of hot springs which are absolutely free of cost.
9) Shop From Budget Supermarkets Like Bonus, Kronan
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) Eat The 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 Bed Sheet And Sleeping Bag
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. We were carrying our sleeping bags and it helped us saving quite a lot of money.
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. To give you an example, we bought car insurance for $10/ day by booking it online in advance. Our car rental company was selling insurance at $40 /day. So we highly recommend you to book in advance. It will not only save you money but also time.