How To Do Iceland On A Budget

Iceland On A Budget – Ultimate Guide

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.


2) Camp

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.

Camping Site – Skaftafell National


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.

Beautiful River With Fresh Water

 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. 


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 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.

Our 4 WD Rented Car


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.

Hotspring at Landmannalaugar


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.



Author: Offbeat Wanderlust


  1. Great tips for spending time in Iceland on a budget! I would definitely rent a car with a group of people or even rent a camper (never done that before, sounds like fun). Thanks for pointing out the names of the budget supermarkets, it’s always hard to figure it out in foreign countries!

  2. I m saving this link to plan our Iceland trip. You have put amazing details and it certainly helps budgeted travelers like us to plan a trip to this beauty. Thanks for sharing.

  3. I agree that AirBnB’s are better than hotels in almost every way; I much prefer them. I would probably pass on the hitchhiking, but I would love to hire a camper. I would probably eat the hotdogs all the time even if they weren’t cheap eats!

  4. this is such a useful post , I always thought it will be an expensive trip but now knowing there are free destinations like Jökulsárlón Lagoon, Seljalandsfoss Waterfall I am sure to make some savings thanks to you.

  5. Iceland is one of our favorite places on Earth and you just summed up pretty well on how to save the dime there! Lot’s of free stuff to do 🙂

  6. That’s a very nice and elaborate guide to saving on travelling. We always have the best experiences while travelling broke. Check my blog out for more!

  7. Iceland is very expensive, and I agree with your tips on Airbnb and buying your own food. We bought fresh sandwiches from the local bakery to take with us on trips. The hot springs are a great, and cheaper, alternative to the Blue Lagoon too.

  8. Great post, thanks for sharing. I’d love to visit Iceland one day and the cost is the only thing putting me off. Will definitely consider some of your tips and hacks when planning!

  9. Travelling to Iceland myself last year I can say these are really good tips. The country is expensive and we spent a lot, but w tried our best to save where we could. We cooked our own food, did free activities, like hiking and hot sorings. We rented a camper van and the only thing that could have saved us even more if we slept in a tent at campsites. Hiring a normal car is way cheaper than camper van. But we didn’t want to save on this as I get cold really quickly and it can be rainy in Iceland. So didn’t want to be chilly for 2 weeks contstantly. We slept in tent in Norway and I learned my lesson! 🙂

  10. great tips! I loved visiting Iceland but it was sooo pricey, even when we made our own breakfast and lunch every day! The hotdogs are a great tip… I didn’t believe they would be decent to eat before we visited but they weren’t too bad 🙂 Nice tips, I hope other travelers find them useful to save on costs during their trip!

  11. Iceland is SO high on my bucket list but the price has always put me off – this post is so reassuring! I hate that so many Scandinavian accommodations charge for bed linen – just let me sleep! Haha!

    1. true..i still dont get the logic of charging for bed sheet. might as well just put it in the stay cost.

  12. Fantastic tips to see Iceland on a budget. I visited Reykjavik more than 15 years ago and was fairly pricey then. Would love to hire a camper and explore Iceland. I need to check out your list of free hot springs!

  13. This is so amazing! I definitely want to do Iceland one day since I’ve been seeing so much of it from pictures. It looks simply amazing. I also don’t want to break the bank so this is perfect advice!

  14. I didn’t realise Iceland was so expensive! This is a really helpful list filled with great tips, Iceland is on my bucket list but in winter so it might be a bit cold for camping!

  15. As a shoe-string budget traveler who really wants to explore Iceland this is a really helpful post for me. You have noted most things I would look for when planning a trip but I love how you’ve mentioned the free things to do and see and also hot-dogs. It’s uncanny in how many countries hot-dogs have been a life saver (not literally) for me :d Great post, hoping to get out to Iceland in the next year sometime.

  16. I’m really hoping to take an extended backpacking trip around Iceland with my son in the summer of 2019. It will be a first-time visit for both of us. These tips are really helpful!

  17. As usual, all your pictures are breathtaking! I love your ‘how to do things on a budget’ tips, they’re always useful and in a country like Iceland, you need them! Thanks for sharing.

  18. I’d have to say that your best tip here is camping as that will just save huge portions of money considering on how damn expensive accommodation is in Iceland. That’s also very doable as well, especially in the warmer months!

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