The Ultimate Guide to Iceland on a Budget and Beyond!

Iceland on a budget

blog authorBy Johanna Sigurðardóttir shield verificationVerified Expert

    Hey, fellow budget-conscious travelers! Ready to conquer Iceland on a budget? Oh, you bet you are! We know you're just itching to explore the land of fire and ice without breaking the bank. Well, we've got great news! With a little planning and a lot of creativity, seeing Iceland on the cheap is totally achievable.

    To save you time and money, we've compiled the ultimate guide to traveling in Iceland on a budget. So, grab your Viking helmet, pack your sense of humor (it's a must), and get ready to unearth the best hacks, tips, and deals to make your cheap Iceland dream a reality.

    The Basic Costs of Exploring Iceland on a Budget in 2023

    To explore Iceland on a budget in 2023, it's essential to have a clear idea of the costs and expenses involved. That's why we have prepared a helpful overview that you can use as a reference.


    There are plenty of affordable accommodation options in Iceland that won't break your budget. From camping to hostels and guesthouses, you can easily find a place to crash in Iceland without exceeding your spending limit. On average, you can expect to pay around $115 a night for mid-range accommodation, so it's important to budget accordingly.

    Iceland on a budget accomodation


    Since public transportation is limited in Iceland, you'll likely need to rent a car. There are also other options available to travel in Iceland cheaply, such as domestic flights and buses. Here is a breakdown of what each mode of transport will cost you:

    • Car Rental: Freedom to roam from $45 to $200 per day, plus gas costs, allowing you to uncover hidden gems in remote areas at your own pace.
    • Domestic Flights: Hop between major cities easily, with prices ranging from $70 to $100, offering convenience and time savings.
    • Bus: Budget-friendly at $10 to $15, perfect for city exploration or shorter trips, with stunning vistas to enjoy along the way.

    You can also check out our article about The Cost of an Iceland Trip for more information.


    If you plan on doing activities in Iceland on a budget, then it's important to know where to look and what kind of attractions are available. Here is what you can expect to pay:

    • General Average: Plan to spend around $30 daily on various activities, including admission fees and modest expenses.
    • Guided Day Tours: Affordable Iceland tours range from $65 to $250 per day, including transportation and lunch (depending on the tour).


    Food in Iceland is usually quite expensive. However, it's possible to eat well for less with a little bit of planning. Let's compare the costs of eating out versus cooking at home:

    • Eating Out in Restaurants: On average, expect to spend around $80 per person daily, including drinks.
    • Eating In: Prepare food at home to save money! You can buy groceries for around $15 per person daily.
    • Doing Both: You can save money by doing a combination of both eating out and cooking at home, with an estimated budget of $50 per person daily.

    Iceland low cost travel

    Helpful Tips When Traveling Iceland on a Budget

    Now that you know the basics of budgeting and planning for your trip to Iceland, here are some extra tips and hacks to help you plan a cheap Iceland vacation:

    Renting a Campervan to Maximize Your Adventure for Less

    For the most unique way to explore Iceland on a budget in 2023, renting a campervan is hard to beat. By investing in a campervan rental, you'll save money on accommodation and transportation and be free to explore Iceland's stunning nature at your own leisure. Plus, you'll have a home away from home with all the necessary comforts.

    You'll also get the opportunity to meet other budget travelers along the way and take advantage of all the best free camping spots in Iceland.

    Get A Reykjavik City Card

    If you want to rock out in Reykjavik without spending money like a Kardashian, consider getting the Reykjavik City Card. Although walking around places like Hallgrimskirkja and the old Harbor is free, some places still charge a fee.

    With this gem, you'll score free entry to cool spots like the Arbæjarsafn Open Air Museum, the National Museum of Iceland, and Reykjavik Zoo! This card is particularly handy for traveling to Iceland on a budget.

    Go During Off-Peak Times

    During summer (June to September), everyone squeezes together like sardines on Icelandic beaches and everywhere else. To avoid the crowds, go in Spring or Fall, when prices are lower and nature is extra vibrant. Plus, you'll get to observe the Aurora Borealis during winter if you're lucky!

    Iceland low season prices

    Don't Buy Bottled Water

    Buying bottled water on the island is unnecessary and may make you look silly. Iceland has high-quality water from the glaciers, making tap water better than bottled water. It's better to bring or purchase a water bottle and top up as needed straight from the tap.

    Bring A Buddy

    Solo travel can hit your wallet like a stealthy ninja. Invite a friend and share expenses to help save money. If you are staying alone in a hotel room, you may have to pay $300, while they would charge $130 per person if you were sharing the room with someone else. You can also split the cost of your campervan rental, gas, and food costs with a buddy.

    Go Camping

    Camping is the cheapest and most fun way to experience Iceland on a budget in 2023. While there are several options for accommodation in Iceland, camping remains one of the most affordable. You have various choices, ranging from wild camping to campsites with basic amenities. Prices range from $10 to $20 per person per night, depending on the season and location. 

    If you plan to camp in Iceland, consider purchasing a Camping Card. This card costs €159 and provides 28 nights of camping access for a family of two adults and up to four children at various campsites around Iceland.

    Camping in Iceland

    What Are The Best Free Attractions For A Cheap Iceland Vacation?

    When traveling to Iceland on a budget, it's important to maximize your enjoyment of the country without spending a fortune. Here are some of our favorite free things to do in Iceland:

    Check out Reykjadalur Valley 

    Get ready to be blown away by the magical Reykjadalur Valley in Iceland! It's a nature lover's dream come true. Picture yourself hiking through stunning landscapes, soaking in geothermal hot springs, and relishing the serenity of this untouched wonderland. The best part? It's just a short drive from Reykjavik, making it a perfect day trip.

    Visit Majestic Waterfalls

    Iceland has over 10,000 waterfalls, so you can easily find free attractions to explore. Some of the most stunning waterfalls in Iceland are Gullfoss, Seljalandsfoss, and Dettifoss. Plus, they offer stunning photo opportunities and a chance to reconnect with nature without spending a penny.

    Hike Through the National Parks

    Iceland is home to some breathtaking national parks and the best part? You can explore them without spending a dime. The most popular national parks include Þingvellir, Vatnajökull, Snæfellsjökull, and Skaftafell National Park. You can also hike through Landmannalagar, renowned for its diverse landscape of rocky mountain trails and vivid volcanic lakes.

    Iceland national parks

    Discover Mesmerizing Black Sand Beaches

    Iceland's black sand beaches are free and gorgeous! With dramatic cliffs, powerful waves, and captivating sunsets, these beaches are perfect for traveling to Iceland on a budget. Some of the most popular spots include:

    • Reynisfjara Beach
    • Djúpalónssandur Beach
    • Diamond Beach

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    Spot Wildlife at Jökulsárlón Glacier Lagoon

    Jökulsárlón Glacier Lagoon is a must-see if you want to travel to Iceland cheaply. It's a breathtaking glacier lake filled with icebergs and surrounded by a wild landscape of volcanoes, mountains, and glaciers. Plus, you can spot birds like puffins and seals that hang out around the lagoon.

    Aurora Hunting

    The Aurora Borealis is one of nature's most remarkable shows. Although you may not always be able to see it, Iceland has some of the best spots to check out the Northern Lights. The best time to see the celestial display is during winter (November to March). All you need is a clear night sky and your own two eyes! Best of all, it's free – the perfect activity for a cheap Iceland vacation.

    Northern lights cheap trip

    What Are The Best Cheap Iceland Tours For Under $50?

    Exploring Iceland doesn't have to break the bank! Here are some awesome and cheap Iceland tours for under $50: 

    The Secret Lagoon

    Ah, the enchanting Secret Lagoon! Nestled in the quaint village of Flúðir, this hidden gem is Iceland's oldest natural hot spring. Picture yourself soaking in the soothing geothermal waters, surrounded by untouched landscapes, with a sense of serenity that only Mother Nature can provide.

    Unlike its crowded counterparts, the Secret Lagoon offers an intimate and authentic experience, letting you unwind like a true local. Feel the stress melt away as you bask in the warmth, gazing at the stunning Icelandic sky. It's a must-visit spot for a unique and tranquil escape away from the tourist hustle and into a world of pure relaxation.

    Puffin Express Tour

    Embark on the ultimate Puffin Express adventure with Special Tours, the pioneers of Puffin Watching in Iceland! For over a decade, they've been offering this delightful tour, taking you to the stunning Lundey and Akurey islands just 15 minutes away from Reykjavik's Old Harbor. 

    Their specially designed boat, 'Old Skuli,' gets you as close to the islands as possible, providing an up-close encounter with charming puffins and other birds. Led by licensed guides, the one-hour tour is not only cozy and comfortable, but also fits perfectly into your precious time. This makes it a memorable, affordable Iceland tour you won't soon forget. 

    Puffin express tour

    Plane Wreck Shuttle

    The Plane Wreck Shuttle is a game-changer for adventurers eager to explore the iconic US Navy Aircraft wreckage in Iceland. Say goodbye to the hour-long hike and hop aboard this convenient shuttle, whisking you to the historic site in just 15 minutes. As you embark on an unforgettable journey, immerse yourself in the captivating tale of survival from the 1973 incident.

    The shuttle grants ample time to discover every angle of the plane and its stunning surroundings, ensuring you capture that perfect shot. With departures every 45 minutes between 10 am and 5 pm, there's no excuse not to make this extraordinary expedition a part of your itinerary. This is the ultimate tour to include in your cheap Iceland vacation plans!

    Walk With a Viking

    The 'Walk With a Vikinig' tour will guide you through Reykjavik like a Viking on a mission! The family-friendly adventure is not just your run-of-the-mill walking tour; it's a mythological journey filled with tales that bring Iceland's history to life.

    Discover famous landmarks, hidden gems, and even an Elf home (yes, Elves, they're like friendly neighbors)! Get ready to master Icelandic pronunciation, so you can talk like a true Viking and impress everyone (just imagine you're ordering a feast in Viking style). Join this authentic and cheap Icelandic tour, and conquer Reykjavik with one laugh and step at a time.

    The Underworld of the South

    Beware the eerie Caves of Hella, shrouded in an enigmatic darkness that even time can't unveil. Discovered on the desolate Ægissíða land, these twelve man-made enclaves hide untold secrets, some rumored to predate the very footfalls of Viking settlers.

    As you step inside, a chilling air embraces you, carrying whispers of ancient worship or the forbidden work of the Celts. Bewitched by the dim glow, you'll encounter cryptic symbols, ghostly crosses, shadowy carved seats, and witnesses to a forgotten past.

    Dare to enter the unknown realm and unravel the riddles of these haunted caves. The South's magical Underworld awaits your curious but cautious exploration. This affordable Iceland tour is not for the faint of heart!

    Cheap Iceland tours

    The Reykjavik Tour in 48 hours

    Embark on a City Sightseeing bus tour to uncover the wonders of Reykjavík in your own time. With a 48-hour pass, you'll have ample opportunity to delve into the heart of this enchanting city. Experience the perfect blend of modern urban life and untamed nature, making Reykjavík an awe-inspiring destination. Discover iconic landmarks like:

    Immerse yourself in the culture at Kjarvalsstaðir Art Museum and the National Museum of Iceland. From the glass dome of Perlan to the historic Höfði House, this bus tour offers a captivating way to travel in Iceland cheaply.

    Ferry From Flatey to Brjánslækur

    The ferry ride from Flatey to Brjánslækur is a serene journey that takes you into the heart of Iceland's fjords - and it won't break the bank! Enjoy views of soaring mountains, impressive glaciers, and tranquil bays as you marvel at the stunning landscape. Depending on your luck, you could even spot whales or dolphins as they swim in crystal-clear waters!

    This 45-minute journey is an unbeatable way to explore Iceland's majestic fjords and soak in the tranquil beauty of nature. So, take a break from the hustle and bustle of everyday life, and embark on this cheap Iceland tour to discover the Wild West Coast of Iceland.

    Where To Eat Like a Viking In Iceland on a Budget

    Icelandic cuisine is delicious, and you don't have to spend a fortune to savor it! Here are some of the best places to eat in Iceland on a budget:

    Bæjarins Beztu Pylsur 

    Bæjarins Beztu Pylsur is Reykjavik's treasured hot dog haven! This humble chain of stands has achieved cult-like status, drawing locals and tourists alike with their mouthwatering lamb-based hot dogs infused with an irresistible blend of beef and pork.

    Cheap eateries Reykjavik

    Each delectable creation comes nestled in a soft bun, offering a symphony of flavors elevated by a range of delightful condiments like:

    • Ketchup
    • Sweet mustard
    • Remoulade
    • Crisp fried onion
    • Raw onion

    The magic of Bæjarins Beztu Pylsur lies in its simplicity and authenticity, making it a must-visit for those craving a cheap and satisfying taste of Iceland's culinary heritage.

    Aktu Taktu

    Craving a taste of Icelandic fast food? Look no further than Aktu Taktu, Reykjavik's version of McDonald's! This beloved eatery offers a mouthwatering array of burgers, sandwiches, salads, and other quick bites that will tantalize your taste buds without breaking the bank.

    From locals seeking a quick and delicious meal to curious tourists wanting to explore the local fast-food scene, Aktu Taktu never disappoints. Don't miss their signature burgers, bursting with flavor, and pair them with perfectly golden fries for a truly satisfying experience. For a taste of Iceland's fast-food culture, Aktu Taktu is an absolute must-try.

    Where To Stay In Iceland On a Budget

    From cozy guesthouses to modern hostels, Iceland has plenty of budget-friendly accommodation options that won't break the bank. Here are some of the best places to stay in Iceland on a budget:

    Hotel Odinsve

    Hotel Odinsve is a charming budget-friendly boutique hotel situated just a five-minute walk away from Reykjavík's Laugavegur Street. With a focus on personalized service and guest comfort, it offers 50 rooms catering to singles, doubles, and families. The warm and inviting atmosphere makes it an ideal choice for travelers. Moreover, the hotel boasts the acclaimed Snaps Restaurant, renowned for its delectable French cuisine, attracting locals and visitors alike.

    Accomodation on a budget, Iceland

    Hótel Smári

    Hótel Smári provides a comfortable stay for budget travelers, conveniently located just 300 m from Iceland's largest shopping mall, Smáralind. The well-furnished rooms offer a relaxing environment, and guests can enjoy a delicious hot breakfast each morning.

    With easy access to nearby shops and restaurants, entertainment and dining options are never far away. The hotel's strategic location is just a 10-minute drive from Reykjavík and within 30 minutes of the rejuvenating geothermal baths at the Blue Lagoon.

    What You Need to Know About Traveling in Iceland on a Budget

    From exploring the caves of Hella to discovering iconic landmarks in Reykjavík, there's no shortage of things to do and see in Iceland on a budget. Whether savoring traditional Icelandic cuisine or hitting the road in a campervan, you can find something to suit your budget. 

    With these tips and tricks for traveling in Iceland on a budget, we hope you have been inspired to explore this magical country without breaking the bank!

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