I'll just come right out and say it. It's no big secret that the Land of Fire and Ice can also be the Land of Emptying Your Wallet. But the country's astounding natural wonders make a trip to visit Iceland 100% worth it, and our 2.3 million annual visitors agree. So it makes sense to travel around Iceland on a budget.
There are lots of tips and tricks, many of which we’ll cover in this post. And of course, we’ll include the biggest money-saving tip in Iceland of all.
Visiting Iceland on a budget: Travel tips
When visiting Iceland on a budget, you can save on little items here and there to add up to big savings. Anything you can do to reduce your daily budget for Iceland is welcome advice, right?
Well, let's start with food. We all know that Iceland is expensive, and the cost of food can eat up a large portion of your budget.
Your Iceland food budget
Unless you are traveling with an unlimited Iceland food budget, you won’t be able to eat out at fancy restaurants for every meal. I’d suggest planning your meals around what nights you want to eat out. You can then supplement other meals by visiting lower-cost alternatives like Hlemmur Food Hall in Reykjavik. Cheap food items like Icelandic hot dogs can also be part of a midday meal or late-night snack.
And of course, your food budget in Iceland should include room for shopping at a discount supermarket like Bónus or Nettó. You’ll want to pick up fruits and vegetables both as snacks and to supplemental items like hot dogs or bakery and café items for breakfast. You can also buy your own breakfast staples if you don’t want to spend the money at other establishments.
Lastly, load up on healthy snacks like nuts, dried fruit, and other items. These will be lifesavers in the middle of the day when you need energy for activities like trekking glaciers or hiking waterfalls.
Quick Money-Saving Tips
These are some quick and easy tips that can start saving you money right away.
Tip #1: Bring a refillable water bottle and drink tap water.
While at the supermarket, there’s an item you definitely should not buy. Bottled water in Iceland is a completely unnecessary expense, so spend your krona elsewhere. Iceland tap water is not only safe to drink, but it’s some of the cleanest, freshest, and most delicious in the world.
Tip #2: Fill up on duty-free at the airport and take advantage of happy hour.
On a related note, something you’ll spend a lot of money on is alcohol. If you’re not careful, you can easily pay $10 for a beer at a bar in downtown Reykjavik. Wine isn’t much better, at around $12 a glass. Alcohol is taxed heavily in Iceland, so you need to have a plan if you’d like to enjoy some spirits while traveling.
Duty-free at Keflavik International Airport has the cheapest alcohol you’ll find on the island. This might sound crazy, but stock up with whatever you think you’ll need after you land. Once you start your trip, you can also buy from state-operated Vinbudin (Vínbúðin) liquor stores. It’s cheaper than you what you find in bars and restaurants but still not as cheap as the airport.
And download apps like AppyHour to help you find drink deals and specials when you go out to socialize at bars. Everyone knows alcohol is expensive in Iceland, which is why happy hour is so popular.
Tip #3: Travel during the off-season.
Lastly, coming during low season or shoulder season is a great way to save money in any destination. Iceland on a budget in winter is much easier because you can get between 30-50% off everything. There is less competition for vehicles, lodging, and just about everything else. You can get some really great discounts. Do your research to see exactly what’s on offer and where you can save the most.
Things to do in Iceland on a budget
One of the biggest draws to our small Nordic island is the stunning natural beauty of our country’s landscapes. From the breathtaking waters rushing over the cliff face of Seljalandsfoss to the wonders of Thingvellir, we have an abundance of outdoor natural attractions. And here’s the best part: most of them are free to visit.
Our government recognizes the value of our country's natural treasures and wants them to be accessible to everyone. Both local and visitor alike should be able to experience Mother Nature, so there’s no charge to access many of our most famous sites. And as the old saying goes: If it’s free, it’s for me.
There is one caveat, however. The maintenance and upkeep of these sites is not free, and increasing numbers of tourists are putting pressure on caretakers. There are also the considerations of cleaning up after people, providing parking areas, and even public toilets. As a result, what you’ll find is that instead of charging an entrance fee, you’ll be charged to use the parking lot.
So if you want to walk, great. It’s 100% free. But if you want to use the facilities provided, you’ll have to pay two or three bucks. In the grand scheme of things, it’s not that bad, especially since a cheap meal costs three or four times that amount.
There are also some free museums, churches, and exhibitions in some cities and towns. And if you pick up the Reykjavik City Card, you’ll also find lots of savings.
An Iceland campervan: The best way to see Iceland on a budget
Of course one of the cheapest ways to travel through Iceland on a budget as with an Iceland campervan rental. I always recommend to people this as the best way to see Iceland on a budget. In fact, the rental price per day of an Iceland camper is usually lower than the daily rate of a “cheap” hotel. The hotel cost doesn’t even include renting a vehicle, so combining accommodation and transport will save you tons of money.
There's a reason why campervan rental in Iceland is so popular, regardless of the time of year. Both Icelanders and people wondering how to do Iceland on a budget clearly see the benefits of renting an Iceland campervan.
Your Iceland 1 week budget will be significantly reduced if you decide to opt for a camper. You’ll have more money to splurge on cool outdoor activities like a Vatnajökull glacier hike or an Eyjafjallajökull helicopter ride. You can even go to a nice restaurant one night while you’re Reykjavik, or try some rare Icelandic delicacies while dining.
In addition, the country is well-equipped to deal with the demand of people wanting to go camping in Iceland. There is massive infrastructure of sprawling campgrounds and numerous campsites. The Ring Road also makes Iceland the perfect place to take a road trip.
You also save a huge amount of money with a camper because you have the ability to cook your own meals. Make eggs, coffee and toast for breakfast in your kitchenette for a fraction of the cost of getting it elsewhere. Your campervan usually comes with a small cooler where you can store perishable items like Skyr, butter, milk, and more. Set out a gourmet spread and enjoy the beautiful view from the back of your camper.
Iceland on a budget
If you’re thinking of taking an Iceland budget trip, it’s not an impossible dream. I know travelers who have come here with as little as $50-75 as their Iceland daily budget. You just need to know how to travel Iceland on a budget, and hopefully some of our tips have helped with that. Your Iceland road trip budget doesn’t need to break the bank, you just have to be smart and plan ahead.