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5 Tips To Travel Iceland on a Budget

Iceland on a budget? There are a lot of ways to cut costs once you are there, so follow these 5 tips, then spend your hard-earned cash doing some great adventure (read pricey) activities.

If you are strictly looking for cheap, go somewhere else…like Thailand. However, there are a lot of ways to cut costs once you are there, so follow these 5 tips on how to do Iceland on a budget, then spend your hard-earned cash doing some great Iceland adventure (read pricey) activities.

Expansive views of Iceland fjord.

Cheap Flights To Iceland

The cheapest way to get to Iceland is a stopover on a normal ticket to Europe from North America. Icelandair allows a free stopover, and even has tour options even if you are there just a few hours. We ran into more than one group of travelers who weren’t even staying overnight, but they still got to the Blue Lagoon. The only problem with this option is it usually is for a limited of a time to really do much. For a taste of Iceland, this is certainly a great choice, because it’s almost guaranteed that with a glimpse of what you are missing, you will definitely want to come back.

Different types of camping setups in a free Iceland campground.

Cheapest Accommodations in Iceland

The second largest cost of any trip is accommodations. Jim and I loathe spending too much on a hotel, but honestly we are getting to a point in our lives that we want a few creature comforts on a regular basis, so we have been hoteling more than hosteling or camping. While we were in Iceland, we stayed in clean but rather spartan three-star hotels paying about $200 per night. Yeah, not cheap!

The cheapest thing you can do is camp. Unless you want to pay for electric hookups and dumping (for those huge mobile homes), camping is largely free. Free! Each small village has a tent campground where you just pop up your tent and sleep. We didn’t opt for this, even though we went during the middle of the summer because I was afraid that the permafrost would make us cold. Apparently I shouldn’t have worried.

We ran into camper after camper who just loved the small campgrounds and said they didn’t get cold as long as they kept dry. Most put down tarps and aluminum blankets to ward off the dampness. These small campgrounds don’t have much for facilities, usually just a WC, but each town also has a pool. The pools are open year-round and they only charge around 600 IKr ($5.15) to go, where of course, you can take a great hot shower as well as relax after a hard day of hiking in their geo-thermal hot pots.

There are also a growing number of hostels throughout the country. As far as hostels go, they are not that inexpensive, but are much cheaper than a hotel. The best thing about staying at a hostel is that many of them have laundry facilities which are almost impossible to come by otherwise. Apparently there is no need for laundromats in this country, so travelers have a difficult time of it unless their accommodations provide laundry facilities.

A small free campground near an Icelandic waterfall.

Best Way to Get Around Iceland

The next cost is transportation around the country. Most folks fly into the airport, or they come in on a ferry. Both places require you to take a vehicle to get anywhere. The absolute most inexpensive mode is by public bus. There is a bus route that circles the country on the Ring Road, Route 1.

You can buy a monthly pass that will get you just about anywhere you want to go, and with the exception of just a couple of places, you can easily walk the town or site once you arrive. Of course the downside of buses is time. It takes quite some time to get from one place to another, so you might have to pick and choose where you want to go.

Note: We did see hitchhikers all around the country, but as a mom and a teacher, I have a hard time recommending anyone rely on that type of transportation. However, making friends at your campsite with someone with their own wheels would probably be a good idea, or better yet get together with a group and rent a car.

Jim buys a hot dog from the famous Bæjarins Beztu Pylsur in Reykjavik.

Cheap Eats

Next, you will ask how about the food? The general rule is this, if someone is cooking it for you…it is very expensive. If you buy it in a fast food place or gas station a little less so, but still way too expensive. The Icelanders love their hot dogs, but even a hot dog will cost you 450 Isk ($3.20).

Even if you go to a grocery store, you can still pay quite a bit for some regular staples thanks to the difficulty in the supply chain, but it is imperative to at least buy some of your meals at a grocery store. The cheapest stores we found were the Bonus stores, which I likened to a Piggly Wiggly in the States or a Netto or Lidl in Germany. Also, I think the best thing you can do is buy a tub of peanut butter and bring it with you. In one week, Jim and I decimated ours as we ate it for lunch every single day!

Peanut butter and Icelandic crackers make up part of a budget snack on the road in Iceland.

Budget Activities in Iceland?

Now for the best news! Once you get to Iceland, which has the most spectacular sites, there is no entry fee. The waterfalls, geo-thermal fields, national parks, glaciers…all free! The hiking, flora, fauna, and views, they are all free!  Now, where there were museums, interpretive centers, and such they asked an entry fee, but you could really do the entire country and not pay any entrance fees at all. We only paid four entrances, two museums, a volcanic eruption interpretive center…and the most expensive thing of all the already mentioned Blue Lagoon (not a budget-friendly activity).

Of course there are plenty of adventure activities to do once you get to any of the locations and all of them come at a cost. I would highly suggest you know which activities you’d like to do before you go and budget for them. We did find out that by booking at the Tourist Information Centers you often got about a 10% discount, so keep that in mind. You can book all your activities in one visit, using a credit or debit card and therefore know exactly what your budget is.

To sum it up, Iceland is expensive, but boy is it worth it! If I were doing Iceland on a budget, I would go for two to three weeks so I could take the bus between spots, camp with a night at a hostel every few days to catch up on laundry and such. Also, I would make sure that I planned out all the stops I want to make ahead of time so that it’s well-budgeted.

The views, like the icebergs in Jökulsárlón Glacier Lagoon, are stupendous and free in Iceland.

Have you been to Iceland?  Can you think of any other budget-friendly tips?

Author Bio: Corinne Vail is a travel photographer, food lover, and a perpetual traveler who has been travel writing for over 14 years. For many years she lived overseas in Germany, Japan, Turkey, South Korea, and the Netherlands teaching the children of the US. military. She’s visited over 90 countries, and she’s not stopping anytime soon.

Pin Budget Iceland for later!

The stunning geyser in Iceland.
5 Tips Travel to Iceland on a Budget.
Camping in Iceland near a giant waterfall.

Margherita @The Crowded Planet

Sunday 2nd of November 2014

What a great post. We visited in march 2006, just before the crisis, and were surprised to see how expensive Iceland was! I'd love to tour the island again, perhaps enroute to North America as you suggest! Thanks for the great tips.

Corinne Vail

Sunday 2nd of November 2014

Margherita, It was expensive, but so worth it! I think going again would be awesome. I hope you do.

Michele {Malaysian Meanders}

Monday 27th of October 2014

$200 for a 3-star hotel? Ouch. I'd really like to do a few days in Iceland as a stopover between North America and Europe. It seems to be getting really popular lately. Your pictures are incredible, especially that last one. My kids would absolutely love seeing icebergs. And what is that incredible waterfall behind the campground. I wonder if it's loud at night.

Corinne Vail

Tuesday 28th of October 2014

Michele, I think it would be loud, but a good loud. I love the sound of water when I'm sleeping. Thanks.

Nancie (@Ladyexpat)

Saturday 25th of October 2014

Hi Corrine, This post was like deja vu. I had to check that I hadn't read and commented before. Someone else wrote a similar post recently, and talked about the hot dogs. I would love to go to Iceland, but it is either going to be a quickie visit, or I'm going to have to find a sugar daddy! :) Thanks for linking up this week! #TPthursday

Corinne Vail

Tuesday 28th of October 2014

Nancie, There's no two ways about it, Iceland is expensive...but so worth it!

Molly S

Thursday 23rd of October 2014

This post was well timed - I'm looking into Iceland for next year, and I'm definitely on a budget! With views and scenery like that, I could even be tempted into camping.....Great tips!

Corinne Vail

Tuesday 28th of October 2014

Molly, I hope it helps, and if you have questions just shoot me an email!


Thursday 23rd of October 2014

High on the the list of must visit places for me though the prices are somewhat off-putting.

Corinne Vail

Tuesday 28th of October 2014

Leigh, I know, but honestly sometimes you just can't think about it. At least if you bike it, you will save transportation money!