Updated: 12/20/18 | December 20th, 2018
It’s supposedly one of the least budget-friendly countries in the world — which made visiting even more appealing to me. I always view expensive countries as a challenge.
Figuring out how to visit an expensive country on the cheap is like solving a puzzle to me and I relished the challenge of finding out if visiting Iceland on a budget was possible.
And, after multiple visits to the country, I can tell you that traveling to Iceland can be done on a budget. It’s hard but not impossible to do.
Is Iceland expensive? Sure. The country is small, has a short growing season, doesn’t have a lot of crops, and has to import a lot of things it needs.
But, I’ve always found that the more expensive a place to live is, the more the locals work at finding ways to save money and beat the system. This holds true in every expensive country in the world outside of tax shelter countries like Monaco, Bermuda, or the Seychelles! Those places are just hopelessly expensive.
But, anyways, back to Iceland…
Can Iceland travel be expensive? Yes.
Can you beat the system and visit the country on a budget? FOR SURE!
You just need to be mindful of your spending.
How Much I Spent During My Last Visit to Iceland
While I was there, I spent an average of $54 USD per day (and I could have done it for less). Most of my money went to food and accommodation. Here’s a breakdown of my expenses (rounded to the nearest whole dollar) from my last visit which lasted close to ten days:
- Food: $200 USD
- Accommodations: $180 USD
- Alcohol: $80 USD
- Transportation: $95 USD
- Activities: $39 USD
At $54 USD a day, I don’t feel like I missed out on anything. Sure, I wasn’t eating fancy meals at restaurants (though I did eat out a couple of times) and I certainly couldn’t pay for activities such as whale watching, guided glacier walks, or helicopter rides. And, while those would have been fun to do, I found enough free activities to fill my time.
Suggest Budgets for Iceland
How much does it cost to travel Iceland? Well, not as much as you think as you can see. On the low end, you could get by on 6,500–8,000 ISK ($60–$75 USD) a day. That budget includes using local transportation, staying in an Airbnb, a hostel, with Couchsurfers, or camping; taking limited tours; cooking most of your food (restaurant meals are really expensive); and limiting your drinking.
For around 10,000 ISK ($94 USD) per day, you could eat out, drink more, and take more organized tours and paid activities. At 17,500 ISK ($163 USD) a day, you could stay in a budget hotel and eat out for the majority of your meals. At 25,000 ISK ($234 USD) a day or more, you can do whatever you want!
Extreme budget travelers who plan on hitchhiking, cooking all their meals, Couchsurfing, or camping with their own gear can get away with spending around 4,300–5,400 ISK ($40–$50 USD) per day.
How to Save Money in Iceland: 15 Hacks to Help You
There are many things in Iceland that will eat into your budget and, in the land of $2.50 USD bottles of water, it’s easy to unconsciously spend money. A beer here, water there, a snack there can add up quickly, and suddenly you’ll find you spent an unplanned $100 USD. You have to work to save money here and be conscious of where your money is going. Keep track of every penny! On my first trip, I got tea just about every day (I love tea) but, at $3.50 USD a pop, it was starting to add up so I had to stop.
However, Iceland is a place full of FREE natural beauty and wonder and there are many ways to save money in Iceland. Here are all ways to travel Iceland on a budget, lower your costs, avoid my spending mistakes, and have extra money for your dream adventure excursion:
1. Hitchhike — Iceland is one of the easiest and safest countries in the world for hitchhikers. You can find rides throughout the country. It’s especially easy in the southern part of Iceland. Though harder, it’s also not impossible to find a ride in the off-season or in the sparsely populated north. I hitchhiked in the Westfjords and it often took me an hour or more to find a ride. However, in the south, you’ll rarely wait more than 15-20 minutes.
One way to find rides is ask around in hostels — people are usually driving the main ring road (M1) that circles the country, and there are only two ways to go on that!
HitchWiki has a lot of information on hitchhiking in Iceland.
2. Bring a water bottle — The water in Iceland is incredibly clean and drinkable. A plastic bottle of water costs about $3 USD, so bring a metal water bottle with you and refill from the tap. It will save you a lot of money and help the environment. There’s no reason to buy water here.
3. Camp — Camping is available everywhere in Iceland. You can camp in designated campgrounds for about $14 USD per night and some hostels allow you to put up tents too. Camping is significantly cheaper than hostels (see the next couple of tips). You’ll need to have your own gear and sleeping bag. Moreover, if you really want to save money on accommodation in Iceland, you can also wild camp and not pay any fees (i.e., just sleep anywhere you want!). It’s legal as long as there’s no sign posted to the contrary, it’s not private land (though some farmers might give you permission), and it’s not in a protected wildlife area. I met a Spanish guy who did this for most of his trip.
4. Become a Hosteling International member — Most hostels in Iceland (especially outside Reykjavik) are part of the Hosteling International group, which means they give discounted rates to members. Hostel dorms cost $27-33 USD per night, and HI members get $5 USD off, so if you plan on staying in hostels, the $28 USD annual membership will pay for itself in no time. You can get a membership at any hostel or online before you go.
5. Bring your own sheets or sleeping bag — As with other Scandinavian countries (yes, I’m putting Iceland in that category), many hostels in Iceland charge you a fee for bed sheets if you don’t have your own or a sleeping bag (pillows are free!). Linen fees begin at $10 USD; however, be sure to research your hostel thoroughly as some will not allow you to bring your own sheets/sleeping bag. Note: If you plan on staying in the same hostel for a few days, you’re only charged the linen fee once.
Side note: I find this policy stupid. It’s meant to reduce the spread of bedbugs, but my own sheets can be carrying bedbugs from hostel to hostel. I don’t get it! It would be much better if hostels provided sheets that they washed, especially in Iceland where they don’t have a water shortage!
6. Don’t drink that much – Due to high taxes, it’s very expensive to drink in Iceland. Here are some average alcohol prices:
- Beer: $10 USD (happy hour: $6 USD)
- Wine: $12 USD
- Bottle of wine at the store: $20 USD
- Bottle of wine at a restaurant: $30+ USD
- Shots: $8 USD
Don’t drink and your budget will be fine! OK, maybe once in Reykjavik since its nightlife is world famous. But other than that, don’t. You’ll save a bundle and feel a lot better. No one wants to hike a volcano with a hangover. Most Icelanders don’t go out until past midnight because they want to get sauced at home on the cheap first. (All my Icelandic friends place duty-free orders with me when I come visit.)
And, if you want to drink, be sure to buy tons at the duty-free in the airport and carry with you. It will save 30% off the cost of buying alcohol in the country.
7. Cook your own food — I found food to be the most expensive thing in Iceland. Eating out, even on the cheap, costs about $15 USD or more per meal. Something from a sit-down restaurant with service can cost $25 USD or more!!! It’s easy for your food budget to go through the roof at those prices.
Go grocery shopping. Buy everything you need — such as eggs, cereal, pre-made sandwiches, and pasta — and cook. All hostels, guesthouses, and campsites have kitchens. My grocery bill for about three days of food was the same price as one meal at a restaurant. Make sure to shop at BONUS food stores as they have the cheapest prices.
8. Bring your own tea and coffee – Tea, coffee, or hot chocolate can easily cost 400–700 ISK (even regular drip coffee or a teabag you put into hot water yourself). If you bring your own, you can limit the times you have to buy it and save yourself a handful of krónur.
9. Eat the hotdogs — If you are going to eat out, eat at the sandwich and hot dog stalls you find through the cities. They offer the cheapest (but not healthiest) food in the country. A hot dog costs about $3.50 USD and a regular sandwich will run you about $13 USD (about $17 USD with a drink). A small sandwich is about $8.50 USD. Icelanders have an odd obsession with hot dogs, so as long as the city has more than one road, you’ll find a hot dog stall around.
10. Get a bus pass — During the summer months, you can purchase a countrywide bus pass for $323 USD. If you don’t want to hitchhike, this will be your next cheapest option for getting around Iceland on a budget, especially if you are traveling for a couple of weeks or more. During the winter months, many of the bus routes are closed and this pass isn’t offered. When that happens, you can use the website listed below to find cheaper rides or pay as you go.
11. Rent a car — If you are coming in the off months, staying for a week or less, or don’t want to hitchhike, I would rent a car. They cost between $40-70 USD per day but you can split the costs with traveling companions (or by picking up travelers on the road!) and you’ll get a lot more flexibility than if you take the bus. The best of Iceland isn’t found along its main highway! SADcars offers the cheapest car rentals in the country.
If you rent a car, pick up hitchhikers along the way. They can help pay for gas and lower your expenses. Moreover, you can use the website Samferda to find passengers. This website is very popular and you’ll find a lot of listings on it, especially between some of the big cities. (Note: You can also use this website to find rides. Even if you have to pay the driver, prices are about 50% of the cost of the bus.)
12. Couchsurf — Iceland has a very active Couchsurfing community. I stayed with hosts in Reykjavik and Akureyri and had someone else take me around the famous Golden Circle (the ring of attractions near Reykjavik). Getting involved with the community here is a sure-fire way to save money, get local insights, meet wonderful people, and get a free place to stay. I met a lot of people through the website who took me in and showed me places I wouldn’t have found on my own. Even if you don’t use the website for accommodation, use the community aspect of it and meet some locals. Icelanders are a welcoming people.
13. Find Free Hot Springs – While the Blue Lagoon may be the most popular hot spring, there are lots of others around the country that are free (or at the very least, less money than the Blue Lagoon). Visit the website Hotpot Iceland (hotpoticeland.com) to find the best hot springs all around the island! Some noteworthy hot springs are Reykjadalur, Seljavallalaug, and the underrated Djúpavogskörin.
14. Avoid taxis — The cities in Iceland are small so there’s absolutely no need to waste money on a taxi because you can walk pretty much everywhere. The public transportation is also reliable and much cheaper and they run late so if it’s cold, you can take the bus! Iceland is already expensive enough. Don’t make it worse!
15. Take a free walking tour – Free walking tours are a great way to learn about a new city, its main sites, and get a sense of the culture and history of where you are. I take free walking tours wherever I got! If you’re going to be spending time in Reykjavik, be sure to check out one of the free walking tours in the city!
NEXT STEP —> GET ALL OF MY ICELAND TIPS AND ADVICE!
Want to plan the perfect trip to Iceland? Check out my comprehensive guide to Iceland written for budget travelers like yourself!
It cuts out the fluff found in other guides and gets straight to the practical information you need to travel and save money in one of the most beautiful and exciting destinations in the world.
- My favorite things to see and do
- Money-saving tips
- Budget advice
- Transportation advice
- My favorite non-touristy restaurants, markets, and bars
- And much more!!
Book Your Trip to Iceland: Logistical Tips and Tricks
Book Your Flight
Find a cheap flight by using Skyscanner or Momondo. They are my two favorite search engines because they search websites and airlines around the globe so you always know no stone is left unturned.
Book Your Accommodation
You can book your hostel with Hostelworld. If you want to stay elsewhere, use Booking.com as they consistently return the cheapest rates for guesthouses and cheap hotels. I use them all the time. My favorite places to stay in Iceland are:
- Hlemmur Square (Reykjavik) – A posh hotel with a great bar and traditional Icelandic communal dinners several times a week.
- Kex Hostel (Reykjavik) – Has a café and bar with an awesome happy hour, a comfy lounge, and a heated patio.
- Akureyri Backpacker (Akureyri) – Located in the center of the Old Town with a free sauna and a great restaurant.
- Vagnsstadir Hostel (Hornafjörður) – A great, quiet place if you want to explore glaciers and see the northern lights.
Don’t Forget Travel Insurance
Travel insurance will protect you against illness, injury, theft, and cancellations. It’s comprehensive protection in case anything goes wrong. I never go on a trip without it as I’ve had to use it many times in the past. I’ve been using World Nomads for ten years. My favorite companies that offer the best service and value are:
- World Nomads (for everyone below 70)
- Insure My Trip (for those over 70)
Looking for the best companies to save money with?
Check out my resource page for the best companies to use when you travel! I list all the ones I use to save money when I travel – and I think will help you too!
Becky
This is fantastic, thank you Matt! Iceland has long been on my bucket list, and I’m finally heading up there sometime in 2015 when I do my long-awaited European backpacking trip. I love these tips and will definitely keep them handy – especially good to know about the water, hitchhiking, and camping!
Znajkraj
Matt, there is another hint to travel through Iceland on budget: by bicycle! Iceland is one of the most popular destinations for bicycle touring. I know you know it 🙂
Clay
Awesome guide Matt! Thanks 🙂
David Greenberg
I’m trying to go to Iceland this coming winter for NYE and the week following it. I’m hoping to be able to hitchhike everywhere, as I’m not about to spend $400 to rent a Toyota Yaris for 9 days!
Hadn’t heard about the $10 bedding charge, but then again I’m hoping to exclusively Couchsurf and camp (going to be freezing).
Lynda
I heard if you fly icelandic air you can get a free stop over in iceland. I have not checked this out yet. The book bliss explains it
Ilona
That is exactly what I did. I went from Toronto to Frankfurt with Icelandair and got a free stopover in Reykjavik. Even if you’re just travelling for two weeks, you could spend two nights in Reykjavik and get a quick glimpse of the city and the Blue Lagoon and then fly home when you’re completely relaxed from soaking in the thermal water.
elizabeth
I took advantage of the Icelandic stop over. I had 4 days on my own without kids or husband. I made arrangement to rent a room in someone’s home via AirBnB. It was a large room with access to a kitchen and bathroom. At that time it was less then 50 dollar per night. I took buses around and booked my self on several tours. The Golden Triangle was worth it… Plus it included scuba diving in the Silfra Crack… The next tour I did was horse riding and whale watching.
I arranged to be picked up at the house I was staying… The whale watching was not worth it. But i got to see puffins. So that was cool.
The horses are very cute and unique. Plus we got ride through some lovely areas. I arranged everything before I left home.. Since my time was so short I wanted to make the best of everything.
The fist day I hooked with a couple of young gals sharing the room next to mine and we went to a fleamarket. There I got some good deal on Iceland Wool Sweaters. The later went to a reasonably priced place for the best fish and chips I have ever had …ever. One one of the days I took a ferry over to Viday Island. It it pretty but do not eat at the inn near the ferry dock. It ended up being 27 dollars for a ham sandwich with fries and a cup of tea… But I have to say the it was lovely but it would have been better to skip the food and just walk around. One afternoon I found a place in the middle of Rekjyvick that had the best lobster bisque. It was not dirt cheap but you get a huge bowl for around 12 dollar and it comes with bread… you with people you don’t know on these long benches. So that was fun… for the rest of my meals I had picked up food from the grocery store like cereals and Iceland skyr.. and some juices.
Plus the host suggested skipping the Blue Lagoon thermal baths. It is very expense and very touristy. Besides it is not even natural. In stead I went swimming at the local aquatics center.. It has 2 huge swimming pool and there are many thermal heated hot tubs with various degrees of hotness. I was there in the summer and the sun stays up all night long. It felt strange..
The Icelanders are very nice .
Rebekah
Iceland is a big dream of mine and I’ve always been nervous of the cost though. Hopefully camping/biking would offset the cost… but that tip about hitchhiking sounds pretty good too. As long as my mom doesn’t find out.
Marie
Fantastic article. I’ve had an obsession with Iceland (only enhanced by the cheap direct flights from Edmonton to Reykjavik) but have always been intimidated by stories about the costs. It’s great to see some very reasonable and practical solutions to driving down your day-to-day costs in the country. I’ll have to reconsider visiting soon!
Mike
Iceland has long been on my list of places to go to. This year I’m living in Europe and when I return to the US at some point this summer I’m hoping to stop by Iceland on the way. The cost of visiting was a large concern for me, so thank you very much for these sensible, cost-saving tips!
Ray
Matt,
Who did you fly with to Iceland? One of the comments above asked about Icelandic Air. They still offer up to 7 day stop overs in Reykjavik if you book with them for any flights from North America to select destinations in Europe and vice versa. Thought your North American and European readers should know in case they want to see Iceland, but have limited vacation time! Their offer plus your tips may give your readers good bang for their buck even if they tacked on a quick 3 – 4 day visit at the beginning or end of their North American or European trip.
Cheers,
Ray
Karyn
Hi Matt, this was a really cool article to read, because to be honest with you I had never thought it was possible to stick to a budget in Iceland. I’d kind of lumped it in with all those expensive European countries and never considered there would be ways to keep it this cheap.
I’m really glad you mentioned about the drinking water, because that was the first thing that sprang to mind when you mentioned that bottled water is $2.50. Honestly, I can’t understand why anybody in a country with safe drinking water would bother buying bottled water anyway. I know some people don’t like the taste of tap water, but you get used it (like with anything), and if you’re concerned about impurities, use a bottle with a filter. The environmental damage caused by single-use plastic water bottles is not worth the convenience of buying bottled water.
(Sorry, didn’t mean to hijack my own comment with a slightly off-topic rant, I just get worked up about that sort of thing, haha).
I agree with you on the bedsheets thing in hostels! How weird that some places don’t seem bothered by the risk of people bringing other sheets in from somewhere else.
Marie
It’s a good thing 99% of attractions in Iceland are completely free of charges (waterfalls, sunsets, views, etc.), because I found food and accommodation to be incredibly expensive considering the quality. $120 a night for a private room/shared bath? No thank you.
Next time I’ll go to Iceland I will definitely camp everywhere!
Eve-Lynn
We also loved Iceland and three of us drove a car around, making it a bit more affordable. One of the activities that we loved doing was joining the locals each night at one of their local pools. Almost every community has one and Reykjavik has many. It was very affordable (about $6 Canadian), a great experience, and far cheaper than going to the much more touristy Blue Lagoon. It is a wonderful way to meet the locals and there is nothing better than lying around in the many heated pools in the rain. One of the pools in Reykjavik even has a very large slide that is definitely a must.
Allen
The local pools are definetly worth the admission! Especially on those drisly cold days. They have hot tubs of different heat. People bring their kids, their date . It’s THE place to soak up local stories.
Another cost savings tip: the free walking tour offered by Marteinn. He’s a solo tour guide in Reykjavik who is trying to grow his own business. Very fun, insightful and cheap! Who better to learn from how to live cheaply than a recent student living on a budget?
Veronika
Thanks for the tips, Matt..! I’ve been long planning on visiting Iceland and I feel it in my bones that the time will be right very soon:) It’s very useful to know how to save a bit while in Iceland so that there’s money left for other trips 😉
I’ve heard a lot about the hitchhiking in Iceland and can’t wait to do it..!
Thanks, great post as always.
Kunal Chaudhry
This is awesome! Since I am so keen on going to Iceland, I’ll try and follow this. There’s nothing like travelling to a place and NOT having to say goodbye to your savings 🙂
Theresa Christine
I’m going to Iceland in December, and I’ve heard so many people say it’s expensive and it’s made me nervous. Thanks for listing prices! I will say that I live in the Bay Area, though, so those prices are basically what I pay for drinks and food as well… :-/ But now I feel much more prepared and know more of what to expect!!
Thank you!!
Dawn
Hubby + l (both in our 60’s) are travelling to Iceland Oct 2015. Many great tips, thanks. l think prices are ok, but then I’m from Australia + pay similar prices here.
Looking forward to the cold, currently 34°C here at 7pm.
Holly
Hey Matt!
Great tips. We went to Iceland last year and we too found it to be quite pricey. One thing we did to save some cash was to create our own walking tour to see all of the awesome street art in Reykjavik! It was pretty amazing. We also booked a package through IcelandAir — 5 nights in a downtown hotel with RT airfare, a Blue Lagoon spa package and a guided hunt for the Northern Lights all for about $995. After adding it all up DIY style we saved over $550. I didn’t hate it!
I definitely agree on the water bottle bit! I left my water bottle on my flight in so on the first day I bought a bottle from a grocery store and filled it up every day from tap. It was really quite comical because a handful of locals gave me a hard time thinking I had bought one new every day — the American carrying around bottled water. 🙂 They are quite proud of how clean their water is. It is the best natural drinking water I’ve had yet!
Silja
As an Icelander I can say this is all very correct! It’s very expensive to be in Iceland and those tips are incredibly worthy. It’s true with the water bottles, PLEASE do not buy water in Iceland… it’s ridiculous to do because they fill the bottles in the same place as the tab water comes from. Some people might not like the taste because it’s so fresh so what you do is put it in a bottle and leave it in the fridge over night. Camping is a great way to safe money but be careful to do it on places that is allowed!! We care deeply for our nature and we don’t like any travellers (local or not) to tear up our nature. Stay with a local and very likely they will be very happy about taking you guys on tours that would otherwise cost you a fortune! (like the golden circle or northern lights.. it’s sad how much they charge travellers for that)
Sheri
I really love your site and have come to it often while planning my first ATW trip starting this June in Iceland. I also have your book and hacking guide. 🙂 I just couldn’t make a good budget in Iceland no matter how much I tried. I’m a solo female and don’t really feel comfortable hitchhiking, even if it is Iceland. I read stories of people waiting for hours at a time waiting for the next car to come on very empty roads. I’m a photographer and enjoy getting up early to beat the crowds in locations so a bus really isn’t an option either. I will check out Sadcars though. Is there a trick to getting people to host you on couchsurfing? I asked multiple hosts and no one responded leaving me to book on airbnb and a few hostels around the ring road. Thanks for all your info and know that your site is very motivating to first time solo travelers such as myself.
Marc S
A bottle of wine for $12-20? That is downright cheap compared to Boston, where it is hard to find a bottle for less than $35 in a restaurant!
Also, consider WOW air as a cheaper alternative to IcelandAir. They charge for bags, but the base cost is significantly lower.
Joshi
This is pretty neat Matt! I missed my chance of visiting Iceland a couple of years back…next time I make a plan, this will remain my bible.
$54 per day is pretty good! I certainly thought of Iceland as a bit more expensive than that.
Jon
So, the reason I read this blog is because I am currently sat in my hotel in Iceland waiting to be picked up and taken back to the airport after a great 4 day stay. It was a present from my wife.
I didn’t do any research, paid no attention to what I was spending and have realised that I have spent a SHIT TON of cash in 4 days.
Examples:
1 meal and a few drinks in my hotel – 30,000 (£150)
1 pizza, 1 pasta, 2 lemonade – 7000 (£35)
30 minute taxi back from blue lagoon (missed our shuttle) 15000 (£75)
Now, I’m not complaining as it was all my own choice and frivolous spending but be warned… Iceland can suck you dry of lots of money in a heartbeat – so don’t do what I did… Pay attention!
Katie Scanlan
My husband and I are budget travelers as well. Iceland is very expensive, but your tips were especially helpful! Not drinking was a great way to save money, and on the night we treated ourselves, it was all the more enjoyable! As serial “type a” travelers, we enjoyed Iceland and your travel blog! We were so inspired by our visit, that we wrote a travel guide ourselves. Thanks for sharing your travel adventures!
Ellie
Thanks for these helpful tips, Matt! I’m an experienced traveler but am planning my first solo trip, and there are great money-saving tips in here. Thanks for the info about the sleeping bag advantage, though I’m not sure the regulations of WOW air will make it easy for me to get that on the plane! I’ve already been in touch with a number of people sharing rides on Sam Ferda, and hopefully that will help me find travel buddies for sharing driving costs Jun 28-Jul 3 2016. Keep up the great work! I hope they pay you for it.. : )
Yusman
Hi Matt..thank you so much for the excellent tips. Is there any specific tips to see the Northern lights? Thanks