Last updated: January 4th 2018
Planning a trip to Iceland can be tough and discouraging.
There are countless blog posts and many people telling you that it’s very expensive to travel there.
For some people, yes, that’s definitely the case.
But, if you plan ahead and make smart decisions it’s definitely possible to explore Iceland without spending too much money.
How to Travel Iceland on a Budget
Today, I want to talk about how you can travel Iceland on a budget.
Don’t worry – you’ll still have an amazing time. You won’t have to sacrifice too much comfort and you’ll still have enough money to see and do what you want.
When it comes to planning an Iceland trip there are four different areas where you can keep costs down:
- Sights and attractions
Keeping your costs down in these four areas is going to make it easier for you to manage your expenses while you’re traveling.
This way, the next time someone asks you:
Is Iceland expensive?
You can tell them no and start sharing all of your helpful travel tips with them. Let’s take a look at how you can save money in these four sections and still have an amazing time on your trip to Iceland.
Finding Cheap Places to Stay in Iceland (Accommodation)
You have a few options when it comes to cheap accommodation:
- Camper Van
If you’re trying to save money I recommend avoiding hotels altogether.
You’re unlikely to find one for less than $125- $150 per night.
Even for that price you won’t be staying at the greatest places.
Hostels are a great choice for cheap and comfortable accommodation.
Depending on the time of year you travel you could get a bunk in a hostel dorm for between $25 and $35 per night.
That’s already a significant discount compared to hotel prices. If you’re traveling with a partner you could opt for a private room at a hostel instead and split the cost.
Hostels are a great choice for accommodation. They’re great for meeting new people and other like-minded travelers that are also traveling on a budget.
You’ll be able to share Iceland travel tips and learn more about other affordable things to do in Iceland that you might have overlooked.
If you’re a budget traveler then you probably already know about the benefits of staying in hostels.
- Heading to Reykjavik? Check out this helpful post on the best hostels in the city!
Camping in Iceland
Camping is the most affordable form of cheap accommodation in Iceland. This is especially true if you’re up for roughing it a little and don’t mind spending the night in a tent.
I’ve written a post on camping in Iceland. Take a look to see what your options are for free camping.
Many people are unaware but Iceland has some of the best camping facilities in Europe and it’s the most budget friendly option if you need a place to spend the night.
Just outside of the Reykjavík city center, about 15 to 20 minutes away on foot, is the Reykjavík Campground.
It’s a fully serviced campground where you can take advantage of free Wi-Fi, a kitchen area for cooking, showers and bathrooms, picnic tables and even the indoor common area of the nearby hostel.
If you plan on staying for two nights or longer it’s only about $14.50 per person per night and without a doubt this is the cheapest accommodation you’ll find in the city.
Similarly, all throughout Iceland are many other campgrounds that make for the most budget friendly and practical choice if you’re looking for an affordable place to stay.
I recommend picking up a Camping Card if you’re planning on traveling throughout the country and you want to save on accommodation.
It’s only about $125 and includes 28 nights of camping at any of the listed campgrounds.
The campgrounds available are spread across the entire country and this is a great option if you plan on driving the ring-road.
The only drawback to camping is that you can only do it during the warmer summer months otherwise it will probably be too cold for you to spend the night in a tent. If it’s too cold, or if you don’t like camping, then hostels are your next best choice.
When I travel with my girlfriend we love using AirBnb.
In many of the most expensive cities around the world it ends up being quite affordable to book a private room using the AirBnb platform.
This is even the case with “entire apartments” in many places, which is where you get the whole place to yourself.
Across all of Iceland you’ll find plenty of options for AirBnb accommodation.
Of course, there are the most options in Reykjavik.
Outside of the capital your options start to become limited but there are still places to stay that end up being reasonably priced.
Doing a quick search on AirBnb right now shows me private rooms in Reykjavik starting at around $50 per night. The average private room seems to start at around $80 per night.
For two people you’re looking at anywhere between $25 and $40 per night for accommodation with AirBnb.
If you haven’t already, head over to AirBnb and sign up. By signing up through my link if you’ll be able to get a discount on your first stay!
Renting a camper van knocks out two birds with one stone.
The van rental gives you transportation as well as accommodation in the same cost.
For those of you that want to explore Iceland outside of Reykjavik renting a van is the best and easiest way to get around.
Keep scrolling to the “By Car or Camper Van” section under “Transportation” down below for a more in-depth look at how to take advantage of this style of travel.
If you’re visiting Iceland and you don’t plan on venturing far from Reykjavík then transportation shouldn’t be a problem for you.
The only problem is that the bus system is underdeveloped and doesn’t serve the city as efficiently as it could.
Otherwise, Reykjavík is very walkable. You shouldn’t have any problems exploring the city on foot.
When it comes to areas outside of Reykjavík that’s when you need to start looking into how to get around.
There are domestic airports throughout the country. This gives travelers the ability to fly just about anywhere in Iceland worth checking out.
The problem with flying is that it’s the most expensive option of getting around.
I recommend avoiding flying unless you’re on a tight schedule or it’s the only way you can reach where you want to go.
The ferry is another great way of getting around Iceland. It’s the best choice if you want to get to any spots that aren’t easily accessible by road.
There are many ferries that operate lines between various fjords and islands.
These are ideal if you want to go sightseeing and check out some of the fjords in a unique way.
If this is something you want to do when visiting Iceland don’t worry about the costs. Simply book your ferry tickets and enjoy your trip.
The best way to get around the country is by car or camper van.
Renting a car in Iceland is the most budget friendly way of exploring the island. This way you can see everything that Iceland has to offer.
Many people visit and decide to rent a car to drive the main “ring road”.
This is the famous road that circles the entire country. There is an entire industry of car rental services in Iceland catering to foreign tourists for this reason.
There are a range of different websites that you can use to find affordable car rentals.
Most prices that I found for random dates were between $40 and $50 per day for the most basic car rental option.
You’ll have to add a little bit extra if you opt to go with some additional insurance or if you want a bigger, better car. Keep in mind that you will also pay premium if you don’t know how to drive a manual transmission. It’s a good idea to learn how to drive a standard before embarking on your trip.
I’d also recommend shelling out for the additional insurance.
Usually I wouldn’t suggest this but many of the roads outside of Reykjavík are gravel and not very well-maintained.
You’ll find that cars and trucks will be kicking up stones every time you pass them or drive behind them and it’s very common for your car to get scratched, or even get a broken windshield, when you’re driving throughout Iceland.
By Camper Van
For one person renting a car can be expensive. Though it’s still the most budget friendly option if you want to explore all of Iceland.
If you’re traveling with a partner then it’s not that expensive to split the costs. You could opt for a bigger car, or camper van, depending on what daily budget you’re comfortable with.
For camper vans in Iceland I recommend checking out these sites:
Renting a camper van is a more expensive option than renting a car. The benefit is that it gives you more flexibility on where you can travel. You don’t have to worry about finding accommodation every night either so you save in this regard as well.
Again, split between two people the costs for renting a camper van in Iceland are reasonable compared to the alternatives.
What’s great about a camper van rental is that they typically come with everything you would need for your trip.
There’s no need to spend extra money on cooking utensils, sleeping gear, driving accessories, or anything else. The van rental companies typically provide you with everything needed for a short-term trip around the island.
Using a camper van to explore Iceland also means you don’t have to spend time or extra money finding accommodation. There are a lot of places to park the van and spend the night.
This gives you a better opportunity for exploring everywhere and you can see a lot more of the country that’s off the beaten path.
Keep in mind that you’re going to want to be a confident driver if renting a camper van is something you’re interested in. The weather can change quickly and you could run into trouble if you’re not prepared or confident in your driving ability.
Food and Alcohol
Making Your Own Food
Food enthusiasts are going to have trouble keeping costs low. Restaurants are expensive compared to your typical European travel destination.
However, making and preparing your own food is the best way to manage your costs and keep expenses low.
Depending on where you’re staying you might have access to cooking facilities. If this is the case I recommend buying groceries and preparing your own meals.
You can also pick up smaller items at local bakeries and delis. These are great places to stop for quick snacks.
Breakfast is the easiest to make on your own. You should avoid eating out for breakfast as this is going to be the most expensive meal if you don’t choose to prepare it yourself.
In the morning stop by the grocery store and pick up some energy bars, oatmeal, fruit, or dry cereal. You can grab some milk and drinks if you have access to a fridge.
These items are going to cost you just a few dollars per day and even less if you’re splitting costs with a travel partner.
For lunch and dinner, the grocery store, local bakeries, and nearby delis are your best bet for meals. You can pick up loaves of fresh bread for $2 to $4. Cheese and deli meat will cost you an additional few dollars.
Along with some fruit, drinks, and maybe a few snacks, you’re looking at anywhere from $10 to $15 for lunch and dinner. This is a reasonable amount for one or two people depending on your travel style and dietary preferences.
If you don’t want to prepare your own food you can expect to pay at least $15 to $20 per person per meal at a restaurant. It’s easy to spend upwards of $100 per day on food alone in Iceland. If you’re traveling on a budget you going to want to avoid doing this and simply prepare your own food.
If you’re someone who needs a daily beer to relax you’re going to be in for a surprise once you get to Iceland.
Alcohol and beer is very expensive across the country. I would recommend avoiding getting anything alcoholic to drink at a restaurant or bar.
Sure, it might not be as fun but if you’re traveling on a budget your money would go further if you chose to skip a few drinks.
If you really need to drink and you are dead set on visiting a bar I recommend grabbing some beers or liquor at a local grocery store and drinking beforehand. This way once you reach the bar you’ll only need to buy one or two drinks to have a good time.
I don’t really drink at all so I can’t comment too much on the drinking experience. From what I could see the prices for alcohol are very high in Iceland. It would be a better idea to spend that money on something that would make for a more unique travel experience.
Sights and Attractions
The last area that you can budget for when you’re visiting Iceland are the sites and attractions.
There are various free things to do in Iceland. Many of the best natural attractions are free as well.
For example, you’ll be able to see icebergs, waterfalls, volcanoes, epic mountain ranges, glaciers, thermal springs and wildlife all for free.
There are tours available to check out all of these awesome attractions. Though if you’re on a budget it’s a better idea to rent a car and explore them on your own.
Some of the best things to see in Iceland include:
- Thingvellir National Park
- The Glacier Lagoon
- Skaftafell Mountains and Glaciers
- Myvatn Lake
- Vik, Iceland’s Most Southerly Village
Even in Reykjavík it’s possible to spend a few days there without spending money on any sites or attractions.
Walking around the city on foot will bring you to many of the best landmarks.
Many of the museums, such as the Icelandic National Museum, have a free entry day that you can take advantage of.
Generally, visiting Iceland is all about exploring its natural beauty.
For the most part all of the best natural beauty that the country has to offer is completely free for everybody to enjoy.
How Much Would a Trip to Iceland Cost?
There are a lot of blog posts out there detailing how much money for a trip to Iceland you would need.
In my opinion, it depends on the person and what your travel style is.
Some people are better at sticking to a budget than others. It even depends on what you’re comfortable on eating and where you’re able to cut costs.
With that in mind, I still want to share with you a ballpark idea of how much a trip to Iceland could cost you.
Accommodation ($25 to $50 per day)
On the budget side of things I would expect that you could get away with spending anywhere between $25 and $50 per night on accommodation.
This assumes you’re splitting costs with a travel partner or spending the night camping or in a private room AirBnb.
Transportation ($25 to $75 per day)
For those of you visiting Reykjavik you won’t be spending much on transportation.
To explore the rest of the country you’ll have to rent a car or van. Alternatively you’ll have to shell out on ferries, flights, or buses.
For transportation outside of Reykjavik I would expect that you could get away with spending anywhere between $25 and $75 per day.
This assumes you’re splitting costs with a travel partner.
This daily amount includes things like rental fees, bus tickets, ferry bookings, daily gas fuel ups, and all other typical transportation costs.
Activities ($10 to $25 per day)
Like I’ve mentioned in this guide many of the activities and things to do in Iceland are free.
This is especially the case if you’re hoping to explore the country and check out some of the beautiful natural scenery.
Things like walking tours, admissions to pools or springs, and entrances to churches, monuments, and museums are going to cost you.
I would say that on average you could expect to spend between $10 and $25 per day on various attractions depending on what you’re interested in checking out.
Your cost could also get blown out of proportion if you go on a day trip. These cost at least $100 for things like bus tours, horseback riding, and snorkeling.
Be sure to consider some of the more expense day trips, attractions, and other excursions when you’re planning your trip.
Food and Drink ($10 to $25 per day)
The easiest way to keep costs down here is to simply pick up everything you want to eat at the grocery store or local bakeries.
Drink water and avoid spending money at cafes or restaurants.
Of course this isn’t going to be as fun as going out all the time but if you’re hoping to keep costs down then it’s something you’re going to have to do.
I would say that it’s pretty easy to get away with spending between $10 and $25 per day eating and drinking in Iceland. Your costs will be slightly on the lower end if you’re splitting everything with a travel partner.
At the higher end of the daily budget you could even get away with eating out once or twice during your visit.
Total Daily Costs for Iceland: $70 to $175
In my opinion, your daily cost for a trip to Iceland could be anywhere from $70 to $175 per day.
Keep in mind that this is still on the budget side of things. You can easily exceed the budget in just a few areas if you’re not careful.
Some people will be able to get away with spending less while others are going to end up spending more.
Use these figures as a ballpark when you’re creating your own budget and you’ll be good to go on enjoying your budget trip Iceland.
As you can see planning a trip to Iceland doesn’t have to be expensive.
If you make a small effort to change your spending habits you can easily keep costs down.
Avoid areas where you’re forced to spend money and you can still have an incredible time visiting Iceland.
I wrote this post to show you that you don’t need a ton of money to explore Iceland.
Traveling, even in one of the most expensive places to visit in Europe, doesn’t cost as much as you would think.
Looking for more information?
Check out my post on interesting facts about Iceland!