How to Visit Iceland on a Budget

by Vanessa Furgiuele · June 5, 2018

Over the last few years Iceland has become a destination hot spot. It’s taken over travel blogs and Instagram feeds, with visitors showcasing the vast and wild beauty of its landscape. Formed by volcanoes and glaciers, it’s a rare sight to spot a tree and yet you can’t go a few miles without seeing one of its 10,000 waterfalls. Icelanders take good care of their natural wonders.

It’s also touted as one of the world’s more expensive places to travel. Rum and coke? $16 please. Bagel and cream cheese? Let’s try $18. But for those with slimmer wallets, it is still possible to visit Iceland on a budget and experience the best things this unique country has to offer.

Here are four ways to plan a budget-friendly trip to Iceland.

Skip the tour bus and rent a car

Renting a car is the best way to get around in Iceland. You get to pick the places you’ll see, stop as you need, and save on the added expense of having a guided tour.

Iceland is also one of the easier roads to travel. Route 1, or the Ring Road, is their main road that you’ll get to know very well. All the main attractions fall along it – from the Golden Circle to the Black Sand Beach to Jökulsárlón Lagoon – and traffic is pretty rare so most of the time you’ll be the only driver. Unless you’re driving inland through the volcanoes, a mid-range car is more than adequate and you can save another $10 if you skip the GPS – the whole island has wifi!

Just watch out for the goats.

Your lodging should be one of the first things you book

If you’re exploring beyond the capital, looking for a place to stay will require some planning and booking well in advance of your trip. Airbnb is cheaper than hotels, most of the time, and there are lots of options to choose from. Just make sure you book your stay early because they can go fast. As you get away from the city centre your options get more spread out, so make sure you set a good miles-to-sleep ratio if you don’t want to drive all night…and gas stations get a little thin too.

If you’re going in the late spring or summer months, camping is the cheapest way to go, and depending who you ask the best way to see the country. Camping can be a serious commitment with all the gear you’ll need, but there are outfitters that can provide you with all of the equipment. Guide to Iceland offers a tailored camping experience for eight days, suggesting locations to stay at, attractions to see, and they provide you with everything. Renting a camper van is another way to travel that will give you freedom and comfort. The lodging options are endless, all you have to do is decide your budget and needs.

Place less emphasis on eating out

Going out to eat in Iceland is a sure way to splurge on your budget. Because most of their food is imported it can be expensive. Save your dollars for excursions because that is the best that Iceland has to offer. Go to the grocery store while you’re there to stock up for your Airbnb and to grab snacks for the road. If you want a night out, there are great restaurants in the capital Reykjavik, just be careful where you choose to eat because at many of the best restaurants in the city a simple dinner for two can easily run you over $100.

With the extra dollars you save on meals you can take a guided tour up one of Iceland’s glaciers. For around $80 you can go on a glacier adventure in Skaftafell National Park, exploring its crevasses, sinkholes and more.

Credit: yashima, Flickr.

But if you do want a night out, there are several great restaurants in Reykjavik. Try Durum if you’re looking for a light but filling lunch. The cafe will have your staples – soups, sandwiches and salads – and prices that are easier to digest. Cafe Babalu is another option for a meal that will charm you with its quaint style and decorations. It’s within walking distance from the Hallgrímskirkja church, so you can see one of Iceland’s most iconic landmarks at the same time.

If you’re looking for some late night munchies after a night out, head to Lækjartorg in downtown Reykavik. From sugary fried donuts to fish, burgers and fries, you’ll have lots of late night eats to choose from.

Another option I didn’t get a chance to try while visiting is eating with a local family. A quick Google search can help you find families that are willing to host you for a night and cook you a traditional Icelandic meal.

Avoid fees and lines at Blue Lagoon and head for the free hot springs

Iceland has one of the most diverse landscapes I’ve seen. You will feel like you have visited a new place every day as you travel throughout it. The best part is that most of it is free to see.

A hidden gem is Iceland’s natural hot springs, far better than paying to go to the Blue Lagoon which is packed with tourists and long wait times. Hidden in the Hengill Area is Reykjadalur Valley, just 45 minutes away from the capital. The name translates to Steam Valley, which couldn’t be more accurate. After about a 30-minute hike the trail will open up where you’ll find locals and tourists relaxing in a hot, winding river.

No matter your style, whether you’re the mountain climbing adventurer or the sightseeing tourist, Iceland has plenty to offer at different price points. With some careful planning in advance, you can see this beautiful Nordic island in a budget-friendly way.

Looking for more ways to save money on your travels without missing out? Don’t forget to follow us on Instagram for all the latest!

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Vanessa Furgiuele

Starting with a family trip across Canada at 10 years old, Vanessa’s love for travel started early on. From weekend and work trips to backpacking and living abroad she is slowly crossing trips off her bucket list whenever she can. Vanessa currently works in sustainability and communications for purpose-driven brands in Toronto.