Visiting Iceland on a budget – Money saving tips

If you’re visiting Iceland on a budget and want some helpful tips to maximise cost saving during your trip, you’ve came to the right place! According to Business Insider, Iceland ranks number one as the most expensive place to live in the world. However, it’s not necessarily the most expensive place to visit. Densely populated cities such as London, New York and Oslo are much more expensive, as accommodation costs are high.

Saying that, Iceland is definitely on the pricier side when it comes to living costs. Day to day amenities such as groceries, petrol, eating out and drinks will cost significantly more than most worldwide destinations. Whilst you should budget more for an Iceland trip than other European destinations, there are still some great ways to save money. Follow our visiting Iceland on a budget guide for the full breakdown.

We’ve included money saving travel tips that cover everything from accommodation and eating out, to tours, visiting attractions and day-to-day expenses.

What are the average costs of items in Iceland?

Visiting Iceland on a budget - Susie overlooking Uridafoss Waterfall in Iceland

Petrol/gas – ~£1.50 / $1.93 / €1.80 per litre

A pint of beer – ~£8 / $10.50 / €9.60

Glass of wine – ~£10 / $13 / €12

Public transport (bus journey) – ~£3 / $4 / €3.60 for a local bus journey within a town. Price varies for longer distances

Private airport transfer from Keflavik Airport (Reykjavik) to Reykjavik town – £77 / $100 / €92

Car hire with full insurance (basic car) – £70 / $92 / €84 per day

Hotels – ~£100 / $130 / €120 per night

Hostels – ~£30 / $40 / €36 for dorms | ~£60 / $80 / €72 for private rooms

Campsites – ~£15 / $20 / €18 per person

Main meal in a nice restaurant with an alcoholic drink – £30 / $39 / €36

Fast food meal with drink – ~£15 / $20 / €18

Bottle of Coca Cola – ~£2 / $2.60/ €2.40

Breakfast pastry – ~£2 / $2.60 / €2.40

Eating and drinking

Graffiti showing two famous facing having a drink
  • One of the best things about eating and drinking in Iceland is the highest quality tap water, which is completely free. The country is known for having some of the best glacial tap water in the world. Bring along a refillable water bottle and fill it up in your hotel or at a bar/restaurant to save money throughout your whole trip.

  • Consider booking an apartment, as opposed to a hotel. You’ll be able to some of your own meals and prepare packed lunches for your adventurous day-trips.

  • Be open to staying outside of the main towns and cities if you want to save money. Accommodation on the outskirts of town is often cheaper. The inconvenience isn’t too bad if you plan on renting a car.

  • Iceland has many supermarkets, but prices vary massively between them. The Samkaup brand supermarkets can be the most expensive, whilst ‘Bonus’ is the go-to supermarket for affordable shopping. We recommend doing your grocery shopping at Bonus wherever you can find one, saving the locations on your Google Maps mobile app.

  • If you plan on cooking a few meals yourself to save money, bring food preparation essentials such as food bags, tin foil, Tupperware, cutlery and other items from home. You then won’t need to pay high prices in a supermarket.

  • Restaurant prices vary dramatically in Iceland. You have high-end Icelandic fine dining, where you can expect to pay 7000ISK+ per person. However, there’s also many affordable restaurants, with burger, pizza or taco meals for only 2600ISK per person. Restaurants are generally more expensive than many other countries, but you can still find an affordable meal. We recommend checking menu prices online before arriving at a restaurant.

  • Alcohol is very expensive in Iceland! We’re talking £8 / $11 / 9.5 Euros for a beer… Consider buying alcohol in duty free at the airport and bring it along for your trip. You can also buy cheaper (but still comparatively expensive) alcohol in dedicated Icelandic off-licences. Save even more money by limiting your alcohol consumption.

  • Speaking of alcohol, keep an eye out for ‘happy hours’ in your hotel, or in the bars around town. Happy hour is a common promotion throughout Iceland and you’ll save money on alcoholic drinks late-afternoon to early evening.

  • For a quick lunch on the go, eat in one of Iceland’s gas/petrol stations. You’ll find affordable hotdogs, toasties, sandwiches, yoghurts and other quick snacks.

  • Many food and drink items are imported in Iceland and are therefore more expensive. Buy local brands and foods for a cheaper grocery bill.

  • For cheap tea and coffee on the go, bring along a flask and some instant tea and coffee from home. It’ll keep you warm and energised on those epic road trips.

Accommodation

Visiting Iceland on a budget - Cool hotel in Iceland
  • As with dining options, hotel prices in Iceland vary significantly. You have everything from budget hostels and B&B’s, to high-end luxury boutique hotels. We found accommodation in Iceland to be very affordable compared to other countries, especially if staying in Reykjavik. Compare hotel options in your chosen destination and shop around using a comparison engine such as Trivago. You’ll find the best prices this way.

  • If possible, travel in a quieter month of the year instead of a peak travel month. July and August are the most expensive for accommodation, whilst the winter months of February and March provide much more affordable hotels.

  • Consider booking a self-catering apartment over a hotel if you’re visiting Iceland on a budget. You’ll be able to cook some of your own meals, to save money on eating out. Apartments are also generally cheaper than hotels.

  • If travelling in the warmer summer months, consider camping. There are hundreds of organised camp sites spread throughout Iceland and it can be a very cool and comfortable way to explore the country’s natural beauty.

  • On a similar note, you can rent a campervan or converted van. Drive around at your leisure and stay in your van every evening. Many campervans have cooking facilities too! Note: you’re still required to park in a campsite overnight.

  • Similar to many destinations, accommodation is often cheaper if booked way in advance. Booking the week or day of travel allows great flexibility, but you’ll often pay more.

  • Plan a shorter trip to Iceland to save money. 4 days is an ideal amount of time to explore the dramatic scenery of the South-West. Longer 7-day to 2 week trips have much higher costs.

Attractions

Iceland money saving tips - Shows a group tour
  • A major benefit to visiting Iceland on a budget is the fact that most of the very best natural attractions are completely free. If you hire a car, you can visit hundreds of amazing places without paying a penny in entrance fees. There may be a small parking fee payable at some attractions. If you focus on visiting solely free attractions, your only costs will be accommodation, car hire with petrol, and food.

Some of our favourite free places to visit in Iceland include:

  1. Sólheimajökull Glacier
  2. Gulfoss Waterfall
  3. ‘Geysir’ geothermal geysers
  4. Thingvellir National Park (small parking fee)
  5. Skogafoss Waterfall
  6. Reynisfjara Black Sand Beach
  7. Sólheimasandur DC-3 Plane Wreck
  8. Reykjadalur Hot Springs

  • Tours are a popular but expensive option in Iceland, with many tours costing over £100/$120 per person for a full day trip. Renting a car and exploring yourself is a great way to save money. This can be a very affordable option if travelling with a group. If you feel most comfortable travelling around on guided tours, be sure to shop around to find the best prices.

  • One of the highlights of any trip to Iceland in winter is a chance to see the elusive Northern Lights. Whilst many tours offer paid ‘Northern Lights’ experiences, you don’t actually have to book a tour to see them. As long as you head out of the town, aurora activity is high and the skies are partly clear from cloud cover, there’s a good chance you’ll see the Northern Lights. If staying in Reykjavik for example, Grótta Lighthouse is a prime location for Northern Lights viewing, and it’s only 10-minutes from the centre of town.

  • You may be considering visiting the highly popular Blue Lagoon or Sky Lagoon natural spas. Whilst both attractions are great, they’re extremely expensive! When visiting Iceland on a budget, consider dropping a paid spa for one of the many outdoor natural springs. It’s a thrilling experience that you won’t forget and they’re completely free to visit. We were a big fan of Reykjadalur Hot Spring. You’ll find springs such as this one all over the country.

  • When weighing up your paid tour and activity options, choose things that are ‘once in a lifetime’, that you can’t do anywhere else. These experiences are worth a lot more!

  • Iceland is home to hundreds of scenic hiking and walking routes, which are completely free to explore. If you’re an avid hiker, visit during the warmer months for endless hiking routes.

Getting around

Visiting Iceland on a budget - A car park overlooking a waterfall
  • When arriving into the airport, try to avoid jumping in a taxi to get to your final destination. They’re very expensive. Instead, book a coach transfer with your airline or catch the local airport to Reykjavik bus.

  • Consider renting a car when visiting Iceland on a budget. Having a car gives you the freedom to explore on your own terms. Here are our top tips for finding affordable car hire in Iceland:
  1. Rent a small, basic car, over an expensive SUV. Even in the snowy winter months, you’ll get around just fine in a small car as roads are very well maintained.
  2. Make sure you take the full insurance from the rental company. Weather in Iceland is intense so you’ll need cover for ash, gravel and other dangers that you wouldn’t need to consider elsewhere. This will protect your wallet in the event of a claim (which is very common).
  3. Compare car hire prices with different companies for your chosen rental dates. Shopping around can save you a good amount of spending money.
  4. Instead of paying for a satnav from the car rental company, use Google Maps on your phone instead.

  • Group tours are a lot cheaper than private tours and you’ll often see the same places. The only downside is that you’ll see the sites alongside lots of other tourists.

  • For those that want to explore Iceland themselves, without renting a car or joining a guided tour, use the local bus network. Buses cost as little 460 ISK for a single journey, with longer journey costs depending on the route. Buses are infrequent so you’ll have to plan in advance carefully. However, they’re the most cost effective way of getting around.

  • Try to avoid taxis when visiting Iceland on a budget. They’re the most expensive transport option.

Shopping

Shopping on the streets of Reykjavik in winter

As with everything else in Iceland, shopping can be on the more expensive side. Gifts, souvenirs and essential winter gear will be at the top of your shopping list when you arrive. Here are some great ways to reduce shopping costs:

  1. Ensure that you have all of the essential clothing you need before arriving in Iceland. This will save you a lot of money, especially as you can compare and find the best prices online in your home country. If travelling in winter, buy your boots, thermals, hat, gloves, etc in advance.
  2. Buy any gifts and souvenirs in Reykjavik. There’s a lot more shops and stalls than anywhere else in the country, so you can shop around to find the best prices.
  3. Try to shop before departing for the airport at the end of your trip. As often the case, airports are expensive, even with tax-free prices.

Money

Visiting Iceland on a budget - Shows a famous monument in Reykjavik
  • If you plan on buying lots of gifts and personal items, you can claim the tax back at the airport on departure, so remember to keep all of your receipts.
  • Debit/Credit Card is accepted almost everywhere in Iceland, covering everything from parking to toilet fees. Bring along a foreign transaction card such as Monzo or Revolut to get the best possible exchange rates. We didn’t use physical cash at all during our tip, which is another money saving bonus. You won’t need to exchange any cash back at the end of your trip.

Our final tip for visiting Iceland on a budget is to plan as much as possible in advance. Ensuring that you have booked accommodation, affordable restaurant options saved, and a way of getting around, will eliminate last minute and unexpected costs. You’ll also see and experience more when you plan. There’s a lot to explore in Iceland so you’ll want to make the most of every moment!

Check out our other Iceland travel guides for help planning your trip:

4 days in Iceland itinerary – The best things to do

The Golden Circle Route Travel Guide

The best places to stay in Reykjavik

That wraps up our guide to visiting Iceland on a budget. Whilst it’s an expensive country to visit, there are plenty of ways you can reduce your outgoing costs, still having an amazing time. Stick to the tips we’ve listed in our article and you may be surprised at how little you actually spend!

If you have any other questions about visiting Iceland, or costs in particular, be sure to post a comment below.

PS: if you want to find out more detailed information about our 4-days in Iceland, then check out our travel guide on our YouTube channel below:

Ricky

By Ricky

Author bio:

An adventurer at heart that loves anything outdoors. Beaches, mountains and amazing scenery is everything I love about travel! I also enjoy home comforts and need a nice place to relax and re-charge after every trip.

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