joellebohringerWelcome to the land of fire and ice, where stunning landscapes, captivating culture, and otherworldly experiences await at every turn. Yes, we’re talking about Iceland – a destination that often conjures images of majestic glaciers, bubbling hot springs, and the mystical Northern Lights dancing across the sky. However, for many budget-conscious travelers, the mere thought of exploring this Nordic gem might seem daunting, with tales of exorbitant prices and hefty expenses.
But fear not! Contrary to popular belief, it’s entirely possible to embark on an unforgettable Icelandic journey without breaking the bank. In fact, my husband and I went on our honeymoon to Iceland. Even while enjoying some small luxuries, we still managed to travel on a relatively small budget! Check out our full budget break down here.
From navigating the enchanting streets of Reykjavik to venturing off the beaten path to discover hidden gems, Iceland offers a plethora of budget-friendly options for travelers keen on experiencing its wonders without draining their savings.
In this comprehensive guide, we’ll delve into the art of traveling on a budget in Iceland, sharing insider tips, tricks, and practical advice to help you make the most of your Icelandic adventure without sacrificing comfort or missing out on the magic. Whether you’re a solo backpacker, a couple seeking a romantic getaway, or a family in search of affordable yet unforgettable experiences, this guide is your passport to exploring Iceland without breaking the bank.
So pack your bags, grab your sense of adventure, and join us as we uncover the secrets to experiencing the land of fire and ice on a budget. From budget-friendly accommodations and transportation hacks to free attractions and dining tips, get ready to embark on the journey of a lifetime without burning a hole in your pocket. Iceland awaits – let’s make your budget-friendly Icelandic dream a reality!
11 Tips for Travelling Iceland on a Budget
1. Travel in the Off Season
Iceland definitely has peak tourism seasons. Most notably, it is considerably more expensive to travel in the summer, as this is the busiest time for tourism in Iceland. Trips during spring or autumn will be considerably more affordable. Trips during the winter are by far the most affordable.
On a trip in January, you can expect to save more than $100 per night at a hotel in comparison to a trip during the summer months. Similarly, car rentals cost about 40% less during the winter months.
2. Self Drive
Renting a car is by-far the best and most affordable way to see Iceland. A lot of travelers decide to stay in the capital Reykjavik and do day tours to different locations across the country. However, these tours end up costing considerably more than a car rental, and they also greatly limit your freedom to explore the country.
For those who are uncertain of their driving abilities, Iceland is one of the easier countries to drive in. There is almost no traffic, and roads are very developed. Even for a relatively inexperienced driver, driving in Iceland can be a great experience.
A day trip to Iceland’s Golden Circle can cost more than $200 per person. A 4×4 vehicle can be rented for as little as $30 a day. While gasoline is expensive, self-driving is still a far more affordable option.
3. Consider Renting a Campervan
If travelling during the spring, autumn, or summer, consider renting a campervan. These campervans serve to fulfil all transport, accomodation, and dining needs, as they include a bed and a small kitchen.
Campervans can be rented for as little as $73 per night. There are hundreds of campsites all around Iceland. Some campsites may charge $10-$20 per day for use of showers, electricity, and toilets.
I honestly don’t reccomend renting a campervan in the winter. Even if the campervan comes with a heater, it is still rather uncomfortable to use campground showers in the freezing winter weather. However, campervans are a great option for the summer, when hotel prices skyrocket and the weather is beautiful!
Campervans can also greatly reduce your cost by allowing you to cook all of your meals. Dining in restaurants is very expensive in Iceland, and cutting down on meal costs can help massively while travelling on a budget.
4. Eat from Grocery Stores
This is probably my favorite tip for travelling on a budget in Iceland. Even a simply hamburger meal at a gas station is likely to set you back about $20 per person in Iceland. Meals at proper restaurants cost around $40 per person. In short, dining out is incredibly expensive in Iceland!
Grocery stores, on the other hand, have similar prices as a normal grocery store in North America or Western Europe.
Even if you chose to stay at hotels, I reccomend stocking up on picnic essentials for lunch. Buying bread, meat, and cheese for sandwiches can help you save large amounts of money.
We even brought an insulated cooler bag with us in our luggage, and it allowed us to keep ingredients for our daily picnic lunches fresh and cold.
The cheapest grocery store chains are Bonus and Kronen. They are located in every major city in Iceland, and they are a great way to stock up on food at a low price.
5. Choose Guesthouses over Hotels
If you chose not to rent a campervan, guesthouses can provide significant bang for your buck over traditional large-scale hotel chains.
Since tourism has become more popular in Iceland, many families have built small guesthouses on their properties. These guesthouses are often considerably cheaper than a mainstream hotel, and they often have even better levels of local hospitality. They are a perfect way to travel Iceland on a budget.
When we visited Iceland, the average hotel stay cost more than $200 while we were able to have a similar level of quality at a family’s guesthouse for less than 50% of the price.
6. Look for Accomodation with Free Breakfasts
A lot of hotels and guesthouses come with free breakfast. They are often the same price as hotels that do not include breakfast, and this is a great way to eat well on a budget.
Most of the hotels and guesthouses that we stayed at had incredible, fresh breakfasts. By eating a hearty breakfast in the morning and a light picnic lunch from the supermarket each day, you’ll be able to cut your costs considerably!
Considering that the average meal costs more than $20 per person, free breakfasts are one of the best ways to cut costs!
7. Choose Accomodation with Cooking Facilities
Another great option is to look for hotels, guest houses, and cottages that include self-catering facilities. This greatly reduces cost, as it allows you to cook all of your own meals.
One of our favorite places that we stayed on our entire trip was at Minniborgir Cabins in Minni Borg on the Golden Circle. It included a full kitchen and private hot tub at a great price!
By cooking all of your own meals, you could save up to $100 per person per day!
8. Book in Advance
One of the best ways that you can save considerable money on your trip to Iceland is by booking in advance.
As Iceland is a very popular tourist destination, many car rentals and accomodation sell out quite quickly. In order to help ensure that their product will be sold out, many vendors offer significantly lower prices for people who book their accommodation or transport far in advance.
If you know you are travelling to Iceland in the future, be sure to book in advance to save money.
For instance, for summer car rentals, you can often save hundreds of dollars by booking a few months in advance!
9. Consider Free vs. Paid Hot Springs
Hot springs are a huge attraction for many people travelling to Iceland. The most popular hot spring, the Blue Lagoon can cost more than $100 per person during the high season. This is not always the greatest option for people travelling Iceland on a budget.
When we visited Iceland, the Blue Lagoon was actually closed due to a volcanic eruption. We ended up looking for free public hot springs instead, and we were amazed by what we found.
The absolute highlight of our trip was visiting the free Saljavallalaug heated swimming pool in the mountains of Iceland. I’ve even written a complete guide to the site here.
Visiting a free hotspring can often save you hundreds of dollars while offering a more unique and noncommercial experience.
10. Consider a Hybrid Vehicle
Hybrid vehicles are widely available in Iceland, and they are usually the same price as a fully gasoline car to rent.
They not only have great gas mileage, but they are also very easy to charge in Iceland, as there are electric car chargers at every gas station and nearly every tourist attraction. The costs of using the charger is very minimal and is considerably cheaper than gasoline.
For a complete re-charge of our car’s hybrid battery, I only paid $2.49. To drive the same amount with gasoline, it would have cost me $7+!
11. Get Off the Beaten Track
The most expensive accomodation options in Iceland are on the normal tourist trails. If you are self driving, it is worth booking accomodation that is slightly off the normal tourist route.
A guesthouse or hotel 30 minutes away from a major tourist site might be up to $100 cheaper than one very near to the tourist site.
12. Take Advantage of Duty Free
If you are a fan of alcohol while travelling, I reccomend bringing your own alcohol from abroad. Alcohol is very expensive in Iceland, and by brining a few bottles of wine or liquor from duty free in your origin country, you can save a good amount of money while also enjoying a nice drink in the evening.
In total, the alcohol limits for importing alcohol are quite large in Iceland, and you can bring a bottle of your favorite drink without worry.
The average price of a beer in a bar is nearly $10 in Iceland, while you can bring up to 18 cans of beer with you on your flight.
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