Iceland is frequently listed as one of the top 5 most expensive countries in the world! And as an island nation, several things, from gas to food, certainly are more expensive.
But Iceland is also an adventurer’s dream! It has some of the most gorgeous, otherworldly scenery, waterfalls around every corner, dreamy hot springs to soak in, rainbows spanning the sky, and a whole host of adventurous activities and experiences to have. So what is a budget-conscious, adventure-seeking traveler to do?
Thankfully, there are a lot of ways to visit Iceland on a budget and still have an epic trip.
In this guide, we’ll discuss a few strategies to get to Iceland on a budget, and then how to keep costs low while you’re traveling around.
How to Get to Iceland on a Budget
Using a few flight hacks, getting to Iceland from the United States and Europe on a budget has never been easier.
Flights from mainland Europe to Iceland are regularly in the $100-200 range. While flights from the US are generally much higher than from Europe, you can regularly find deals on flights to Reykjavik, with a round trip costing between $400-500.
I like to keep an eye on flights via Google Flights tracking or follow flight deals sites like Scott’s Cheap Flights to get notified of when good prices pop up. There is also a newly opened budget airline focusing specifically on Iceland, Play Airlines, which delivers inexpensive flights from North America and Europe
Cost of Goods in Iceland
Okay, so you’ve gotten to Iceland on a relatively inexpensive international flight.
Cost-wise, that was the easy part! Traveling around Iceland on a budget can be tricky, as lodging, gas, taxis or buses, and food are known to be extremely expensive.
For reference, here are some typical costs you might see in Iceland:
- Cost of a taxi from Keflavik International Airport to Reykjavik city center (about 45 minute drive): $200
- Cost of the bus between Keflavik airport to city: $30
- Cost of gas: $8-9 per gallon
- Cost of burger: $20
- One bowl of lamb stew: $22
- Basic hotel: $150-200 (but varies depending on the area. The choices are smaller and costs higher outside of Reykjavik)
There is good news though! The cost of groceries is much more reasonable than the cost of restaurants, and almost all of the sites in Iceland (waterfalls, beaches, hikes, geysers, hot springs) are free to visit.
Lodging in Iceland on a Budget
While you can do an Iceland road trip staying in more budget-friendly guest houses, the nature of a trip to Iceland (insanely cool attractions spread out around the country), combined with the fact that lodging and restaurants do get more expensive outside of Reykjavik, mean that the best way to do Iceland on a budget is to travel around Iceland by campervan.
If you’ve never considered a campervan trip, don’t scoff! I was initially very hesitant and not really interested in traveling by campervan, but the week we spent campervanning around Iceland was truly one of my absolute favorite travel experiences, ever.
Here’s why traveling by campervan makes for both an epic trip and is a great way to see Iceland on a budget.
While the cost of a campervan varies depending on the size of the van you get, the extra amenities you might add, and the company you go with, you can rent a campervan for around $700 for a week.
This covers the cost of both your lodging and transportation and also helps subsidize your food costs! The campervan provides you with a refrigerated cooler and a burner stove so that you can store groceries and prepare simple meals. This helps immensely with keeping your food costs low, and also helps you spend more time doing what you came to Iceland to do – explore the country!
It helps that Iceland is set up really well for campervanning. With campervanning being a popular mode of travel in Iceland, there are many great campsites available around the country, plus it’s not difficult to find public bathrooms and showers.
The showers and bathrooms were, without exception, incredibly clean and nice – and this is coming from someone who absolutely hates a public shower, so that’s saying a lot.
Saving Money on Food
With food in Iceland being so expensive, and with traveling by campervan (with a burner stove and electric cooler provided), I highly recommend you buy groceries and make your own meals.
Common grocery stores in Iceland include Netto, Bonus, and Kronan. Bonus is the cheapest, but Netto has the best pastries (more on that below!)
We grabbed breakfast bars and yogurt for breakfasts, crusty bread, smoked deli meats (try the smoked lamb for a different experience!), yogurt, protein bars, and/or fruit for lunch.
For dinner, we took a slightly different tack. We usually made up a dehydrated meal pouch we brought with us from the United States. This was actually a brilliant move! The weather in Iceland, even in summer, can be chilly and volatile, and there were so many things we wanted to see that it was hard to stop.
Thus, we were hungry, tired, and often facing windy or rainy weather when it was time to eat, which really did not motivate us to want to set up a whole cooking situation and spend 45 minutes prepping a hot meal. With the pouches, we just heated water, poured it in, and 5 minutes later had a tasty and hot meal. We supplemented with more of the same from lunch – bread, fruit, etc. This was an economical and easy way to get some good meals in Iceland.
Of course, you can’t travel to a new country and not sample some of the unique cuisine! Here are some things you absolutely must try in Iceland when on a budget:
Hot dogs: Icelandic hot dogs are a beloved national food, and are unique in that they are made from lamb meat and have unique toppings of fresh and crispy onions, mustard, and remoulade. You can find them in any gas station, but the best and most famous spot is Bæjarins Beztu Pylsur in Reykjavik. These are actually a very budget-friendly option, as one hot dog costs around $4.
Lamb stew: You will see sheep and lambs everywhere in Iceland, grazing along (what felt like) almost every road we drove on. Icelandic lamb stew is actually pretty brothy and has other vegetables like carrots and onions in it, and was delicious.
Skyr Yogurt: Icelandic yogurt. It’s the only kind of yogurt in Iceland and is of a thicker variety.
Chocolate licorice: Icelanders love licorice in their chocolate, and the Sirius brand easily has the best chocolate licorice bar (and I’m not a licorice girl at all). These chocolate bars are common at grocery stores.
Fermented Shark (Hakarl): This old-school traditional Icelandic food is, well, definitely a unique experience. If you go into Cafe Loki in Reykjavik, you can ask for a serving of hakarl, which is just four small bite-sized pieces of shark, plenty for two people to share. This will set you back about $7 and is probably the most economical way to try this dish.
Serbokud Vinarbraud pastry: Iceland actually has an impressive pastry game, and the grocery store, Netto, had a lot of high-quality pastries, including serbokud vinarbraud, a flaky pastry with a custardy middle.
Activities in Iceland on a Budget
Thankfully, the majority of the things you can see and do in Iceland are free, which is great for traveling on a budget.
- Most of the Iceland hot pots are free. You do need to pay for the more spa-like ones, but the natural ones are either free or request a small cover charge from the landowners for upkeep (e.g. $5).
- The waterfalls are all free to visit – and there are so many good ones in Iceland!
- Geysir is free to visit, where you can watch geysers erupt or hot pots bubbling
- The black sand beaches e.g. Reynisfjara, Vik, are free
- Hikes (e.g. Studlagil Canyon, Múlagljúfur Canyon, Vik airplane, etc) are free
- Epic viewpoints, like Glacier Lagoon, Diamond Beach, Thingvellir National Park, the Hvitserkur dragon rock, or the Snæfellsjökull volcano are all free
Big-ticket Items Worth Spending Money on in Iceland
Personally, we’re always trying to travel on a budget, but that doesn’t mean we won’t spend some money on seriously cool experiences. In Iceland, we were very happy to save money on our flights, food, and lodging, and spend a little more money on some epic activities. Here are some experiences worth your consideration in Iceland:
A Glacier Hike
Glaciers cover 11% of Iceland and you can actually go climb on them! Because hiking a glacier can be dangerous (there are crevices and holes you could fall into) you must hike the glaciers on a tour, with a guide. The absolute best glacier hike you can do is on the Falljokul glacier, with Melrakki Expeditions. Choose the 5-hour tour – it’s so worth it to get up close to the ice cliffs and see the craggles and ridges in the ice.
The Blue Lagoon
This Insta-famous hot spring spa is right by Reykjavik and is known for its steaming, milky blue waters. While this is definitely a well-known attraction, it lives up to the hype. The water is warm and relaxing, plus you get a drink from the swim-up bar, a mud mask, and the use of the saunas is included in the basic ticket price.
This hot spring spa is on the north coast of Iceland, just outside of Husavik. It’s an infinity pool hot spring, with the spa overlooking the bay of Husavik. The water is nice and steaming and honestly, the views can’t be beaten.
Rafting or Kayaking Tour on the Glacier Lagoon
Go out on a speedboat or kayak on the Glacier Lagoon, weaving in and out between the icebergs floating in the water and getting up close and personal with the ice. You might even see seals popping up!
Whale Watching Tour
Iceland is one of the best spots for whale watching, and the city of Husavik is known as having the best whale watching in all of Europe. Some popular whale watching spots include Husavik, Ayukeri, Reykjavik, and the Snæfellsnes peninsula. I recommend going with North Sailing company – their tours are phenomenal.
If you book a flight to Iceland when it’s on sale, and then use points to book it, save money by combining your lodging/car/food costs by traveling in a campervan, buy groceries for many of your meals, and hit up mostly the free things in Iceland, you can absolutely have a trip to Iceland on a budget! With all the money you’ve saved, you can then choose which (if any) paid experiences you want to do!
During our budget trip to Iceland following this exact strategy, we spent ~$2000 for two people on our 7 day Iceland itinerary, and that was with doing 4 of the more expensive experiences above. Without the splurge on activities, our costs would have been much lower, and still would have been an amazing trip.
The week we spent traveling around Iceland was truly one of my top travel highlights, ever. Iceland is full of incredible scenery and views, with otherworldly landscapes around every corner. You CAN see this beautiful country on a budget!