It’s no secret that Iceland is one of the most expensive countries in the world to visit.
So, as I planned my first trip, I was on a mission to visit Iceland on a totally doable budget!
If you’re not careful, you can blow through your travel funds pretty quickly.
But fear not. I’m here to tell you that discovering Iceland on the cheap CAN be done!
With a bit of planning and a few helpful tips, you can soak in the wonderful experiences Iceland has to offer without breaking the bank.
This post is packed with resources to help you make the right choices and stay within budget on your trip.
And, yes… there may even be a discount code or two sprinkled in there just for you. 😉
So, are you ready to discover 25 EASY ways how to travel Iceland on a budget?
Let’s get into it!
Table of Contents:
- Save on Transport in Iceland
- Accommodation in Iceland on a Budget
- Eat Cheap in Iceland
- Drinking in Iceland on a budget
- Cheap and Free Things to Do in Iceland
- Iceland Maps + Guidebooks
Save on Transport in Iceland
Transportation can take up a big chunk of your trip budget, but don’t worry! There are some smart ways to keep those costs in check.
1. Rent a Manual Transmission
Manual cars tend to be cheaper because most visitors prefer automatics (ahem, looking at you, fellow Americans 😉).
This is one of those small details that often gets overlooked, but it’s a fantastic way of saving money in Iceland.
Honestly, shifting gears isn’t that bad! 😊
2. Opt for a Diesel Vehicle
Filling up with diesel is usually a better deal since the price per liter is more economical and diesel engines tend to be more fuel-efficient.
That means fewer stops at the gas station and more cash for your Icelandic adventures!
3. Rent a Smaller Car
Are you visiting Iceland in the summer?
Planning to stick mainly to the Golden Circle or Ring Road?
If you’re not heading off the beaten path to tackle the F-Roads then you can skip the pricier 4WD vehicle.
You can save LOTS of money with a cheap car rental in Iceland by opting for a smaller car.
Blue Car Rental have a great selection of cars, perfect for Icelandic terrain, and offer 24/7 roadside assistance.
💥Get 5% off your total rental – no code needed!
Use my 👉 VIP link, and the discount will automatically apply at checkout.
4. Visit Outside of Peak Season
Traveling during the shoulder and off-peak seasons can turn your dream trip into an affordable Iceland vacation, with lower prices and fewer crowds.
The peak tourist season runs between May and September, but many car rental companies list vehicles at a reduced rate outside of those months.
If you’ve ever wondered what it’s like to visit Iceland in the winter, you may be surprised at just how magical it can be!
➡️ READ: Iceland in Winter: Must-See Attractions, Driving, Weather, Packing And MORE
5. Skip the GPS
I get asked all the time about choosing WiFi vs. GPS in your rental car, and honestly, I’m all about the WiFi option.
It’s simpler and more convenient.
With GPS setting you back $12/day, you’re better off using my digital map included in my 👉 Iceland Guidebooks + Maps.
Check for the best spots in the guide and the digital map shows you exactly where to find them!
There are over 500 pinned locations from the top attractions to where to fuel up and more.
Accommodation in Iceland on a Budget
Another significant expense on your trip is accommodation.
However, many Iceland budget accommodation options still provide a comfortable stay without breaking the bank.
You could Google for ‘Iceland budget hotels’ and see what comes up, but here are a few alternatives you may not have considered.
Let’s take a look.
6. Couch Surfing
If you’ve never heard of it, couch surfing connects travelers with homeowners wanting to host guests.
I’ve never personally tried it, but I think it’s a fantastic way to save money and meet locals!
This could be a viable option, especially if you’re traveling alone.
Find out more about why Iceland is such a great country to visit solo here.👇
➡️ READ: Solo Travel in Iceland: Why it’s the Best Country in the World to Visit Alone
7. Camping
Camping is another fantastic way to save on accommodation, and I can’t think of a more beautiful country to do it in!
While you need to bring your own gear, there are plenty of budget-friendly camping options available if you’re traveling Iceland on a budget.
Pro Tip: Wild camping is NOT allowed in Iceland, so make you camp in designated areas only!
Camping in Iceland comes with its unique challenges, so if you want to learn more about what to expect, this is a good place to start.👇
➡️ READ: Iceland Camping 101: How To Plan The Perfect Icelandic Adventure
8. Hostels
Joining Hostelling International is a great hack for budget travel in Iceland. With a membership, you’ll get discounts on your stays.
While there is an annual membership fee under $20 USD, you’ll quickly recoup that cost if you use hostel accommodations often.
Just a heads-up: Some hostels may charge extra for towels and sheets, so pack your own if you don’t want to be bothered with added fees.
➡️ READ: Iceland Accommodation: How to Effortlessly Search for and Book the Perfect Stay
9. Guesthouses
On our Ring Road trip, we mainly stayed in guesthouses.
They’re usually cheaper than hotels, and there’s a cozy, homey vibe that’s hard to beat. We were really happy with each spot we chose.
Booking.com is an awesome way to find just the right place for your stay.
Remember to book accommodations with a 24-hour cancellation policy. This way, if plans change, you’re covered without extra costs.
They also have a super convenient app that stores all of your rentals in one place and lists all of the features of each place (check-in time, wi-fi included, parking info, and more)!
10. Rent a Camper Van
I really wish I’d known about camper vans on my first trip to Iceland!
It’s so convenient getting to travel and rest without the hassle of changing hotels.
These vans come fully equipped with sleeping and cooking capabilities, so you’re all set for your adventure.
Since that first visit, I’ve learned my lesson, and now I’m totally hooked! It’s such a fantastic way to travel around Iceland on a budget!
Are you ready to book your camper van?
Happy Campers is the original and BEST camper rental in Iceland!
We’ve used them so many times and are always blown away by their service and the quality of their vehicles.
💥 Subscribe to my email list and receive a special discount when you book with them.
Take a peek at the grand tour.👇
11. Book Accommodation in Advance
With the boom in tourism, Iceland has been facing an accommodation crisis.
If you’ve left it to the last minute to book, you might find yourself paying extremely high prices.
So, here’s a word of advice: Please secure your accommodation as soon as possible!
This post has everything you need to know about booking accommodation in Iceland.👇
➡️ READ: Iceland Accommodation: How to Effortlessly Search for and Book the Perfect Stay
Eat Cheap in Iceland
There’s no question that dining could easily be the most expensive part of your trip to Iceland.
While the food in Iceland is seriously delicious and some things are worth splurging on, you might prefer to save your money for other experiences.
These are a few easy ways to eat cheap in Iceland:👇
12. Buy Food at the Grocery Store
Buy food at budget grocery stores like Bónus and Krónan, and cook your own meals at your accommodation.
Most hostels and guesthouses provide everything you need to whip up a meal, so take advantage of that!
➡️ READ: Iceland Grocery Stores: Your Ultimate Guide to Smart Shopping!
13. Book Accommodation With Breakfast Included
I highly recommend booking accommodation that includes breakfast with your stay.
Not only is this a fantastic way to save money, but it also lets you experience an authentic Icelandic breakfast!
Breakfast culture here is quite different from what a lot of us are used to.
Don’t expect big breakfast buffets or a selection of breakfast restaurants that open early. That’s just not how they do things here.
Having meals included at your accommodation can save you both money and time. Just get up, grab a bite, and head out the door for your next adventure!
If you’re curious about what to expect for breakfast in Iceland, check out the full post below.
➡️ READ: Breakfast in Iceland: Top Eateries, Expert Tips, Breakfast Culture & More
14. No Need to Tip at Restaurants
Icelanders know that tipping is a big deal in the U.S., but honestly, it’s just not a thing here.
Servers earn decent wages, and the cost of meals already includes fair pay.
So, while you might feel like you should tip for good service, don’t worry, you really don’t have to!
15. Eat Icelandic Hot Dogs
Now, I know some of you may cringe at the thought of eating a hot dog, but hear me out – Icelandic hot dogs are unlike any other hot dog you’ve ever tasted.
They’re SO delicious and super affordable, too!
You can find them all over the country, including at gas stations and the famous stand in Reykjavík, Bæjarins Beztu Pylsur.
If you want to try them the Icelandic way, just order “eina með öllu” for all the toppings.
But if hot dogs aren’t your thing, don’t worry, I’ve got you covered with my guide to the best foodie hotspots in Reykjavík, there are great options here, even if you’re on a strict budget.
➡️ READ: Reykjavík Food & Drink Guide: The Best Foodie Hot Spots In Iceland’s Capital
16. Avoid Convenience Stores
You know those moments when you realize just how important planning is?
This is one of them!
Regular convenience store visits can really affect your budget, so if you want to steer clear of those overpriced snacks and essentials, just plan ahead.
Make sure you get everything you need when you swing by the grocery store, and you’ll save yourself some cash.
Trust me, it’s totally worth it!
17. Find Budget Restaurants
Eating out on a budget is possible and you don’t have to compromise on quality or flavor.
My top tip is still to cook your own food, but I get that it’s not always possible when you’re out exploring and need a quick bite.
If you’re looking for ideas on where to dine, here are best budget restaurants in Reykjavík:
➡️ READ: 7 Budget Friendly Restaurants in Reykjavík
Drinking in Iceland on a Budget
When it comes to drinking in Iceland, there are plenty of ways to enjoy yourself without spending a fortune.
Whether you’re after a tasty local brew or a delicious cup of coffee, I’ve got some budget-friendly tips to help you.
18. Shop Duty Free
Buy alcohol at duty-free in the KEF airport.
Trust me on this one!
Get the alcohol you want before you leave the airport.
This will be your second biggest money saver (next to food!). Even Icelanders stock up on alcohol at duty-free!
Iceland imposes crazy high taxes on alcohol, so even if you buy it from the liquor store, it’s going to be pricey.
If you’re planning to order drinks at bars or restaurants, expect to pay $8-10 USD for a standard bottle of beer or a glass of wine.
Ouch!
19. Bring a Travel Coffee Mug
One thing you will not find in Iceland is a Starbucks (thank goodness!)
But Icelanders LOVE coffee, and they know how to brew it well.
You can find coffee at any gas station, and sometimes there are coffee shops right next to them. I’ve even spotted small cafés popping up at the major attractions!
If breakfast is included at your accommodation, have them fill up your mug before you head out for the day!
20. Bring a Refillable Water Bottle
Iceland has the cleanest water in the world – it comes straight from the glacier!
You can fill up from the tap, or from the stream you walk by on a hike.
Seriously, DO NOT waste your money and buy water in Iceland!
21. Happy Hour in Reykjavík
One of the things Reykjavík is known for is its vibrant nightlife.
If you want to experience it, be prepared – this can quickly add up and cost you more than you’ve bargained for.
I suggest taking advantage of the happy hour specials in Reykjavík.
There are A LOT of them! You just need to know how to find them.
Check out this 👉 List of Happy Hour offers in Iceland.
Cheap and Free Things to Do in Iceland
You’re probably coming to Iceland because you can’t wait to explore all the stunning natural attractions.
The great news is that there are so many sites you can visit for free, as well as cheap things to do in Reykjavík.
22. Skip the Guided Tours + Fancy Attractions
If you’re traveling Iceland on a budget, skip the pricey guided tours.
Instead, rent a car and explore on your own!
There are PLENTY of free and cheap things to do in Iceland.
You can chase the Northern Lights on your own (you just need to know where to look).
I’ve put together the best places to see them here.👇
➡️ READ: How To See The Northern Lights In Iceland: Best Viewing Spots, When To Go And MORE
23. Visit the Free Hot Springs
Another good example of a popular attraction that doesn’t come cheap is the Blue Lagoon. If you’re trying to save money, cross this off your list!
Iceland has a vibrant pool culture you can experience without spending a fortune, and exploring natural hot springs is a must while you’re here.
I’ve even put together a list of hot springs that won’t cost you a penny!
➡️ READ: Top 10 Free Hot Springs in Iceland: Unwind & Discover These Hidden Gems
24. Shop at the Flea Market
Try shopping for souvenirs at the flea market or at thrift stores.
I’m always a fan of getting something from my vacations that I can actually use, rather than something I’ll probably throw away someday.
Although the flea market might not have magnets of Gullfoss or stuffed puffins, it’s a great place to find local goods at a fraction of the price.
- Visit Kolaportið, the oldest flea market in Iceland.
Address: Tryggvagata 19, Reykjavík 101, Iceland
Open: Sat/Sun from 11:00am – 5:00pm
- Red Cross
Address: Laugavegur 12.
Open: M-F 10am – 6pm, Sat 12pm-4pm
25. Reykjavík on a Budget
Some of the best landmarks in Reykjavík can be explored on foot.
You can visit the Harpa Concert Hall, window shop along Laugavegur (the longest street in the city) or enjoy the Old Harbour without paying a thing!
Join a free guided walking tour by CityWalk and learn more about the history of Iceland, alternatively learn more about the FREE things to do in Reykjavík here.👇
*Bonus Tip for Visiting Iceland on a Budget
Book everything as far in advance as you can!
By securing your flight, hotel, and rental car ahead of time, you’ll get better rates – which is key for planning a cheap trip to Iceland.
Iceland Guidebooks + Maps
One thing’s for sure, if you’re aiming to travel Iceland on a budget, smart planning is everything!
And honestly, investing in a trusted resource, like my 👉 Iceland Guidebooks + Maps, can save you time, money, and plenty of stress.
From avoiding costly booking mistakes to getting pinpointed locations for dining, accommodation, and must-see spots, this guide is the ultimate money- and time-saving hack.
Plus, you’ll score exclusive discounts that help stretch your budget even further.
So, if you’re wondering how to plan a trip to Iceland on a budget, remember that with a little creativity, smart choices, and careful planning…
You can experience this incredible country without breaking the bank.
Happy planning,
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