How to explore Iceland on a budget

Claiming that “Iceland is too expensive to visit on a budget” is up there with “Don’t eat street food, it will make you ill” as one of the oft-repeated myths of travel. If we listened to them, we’d also miss out on some amazing experiences. True, Iceland can be eye-wateringly pricey, but with some planning, it is possible to visit the Land of Fire and Ice without spending a fortune. Here’s how to make it happen.

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The cheapest ways to get to Iceland

As always, if you book your flights to Keflavík International Airport well ahead of traveling, you’re more likely to bag a bargain. Even better: head to Iceland outside of the summer high season for cheaper flights. According to Skyscanner, the cheapest month to travel to Iceland is April.

Weekend flights are usually more expensive, but if you sign-up for email offers from low-cost airlines like PLAY or Wizz Air, you may get lucky and nab the first tickets available in a sale.

If you’re traveling between North America and Europe, you can also visit Iceland as part of a few days’ stopover at no extra cost on transatlantic flights with Icelandair.

A car drives on a winter road near Akureyri, Iceland. The black road is surrounded by miles of snowy terrain. Mountains are visible in the distance.Visiting Iceland as a group? Hiring a car can be cheaper than traveling by bus © WanRu Chen / Getty Images

How to get around Iceland on a budget

You can get around Iceland by car or bus, with a tour company or via internal flights. In summer, as long as you’re careful to stay off mountain roads, a 2WD hire car can open up much of the country, and roads are generally easy to navigate.

However, with prices starting at Íkr16,000 (US$123) a day in high season (if booked a good way in advance) and fuel costs beginning to soar, having your own wheels does not come cheap, so price up the alternatives as well.

If you can rustle up some travel companions before you depart to split car hire and fuel, it can be the most affordable option for taking a route such as the Golden Circle. You’ll also enjoy the freedom to explore the area at your own pace.

Keflavík International Airport is 50km from Reykjavík. If you’re not hiring a car, opt for one of the airport bus services over a taxi. Although for larger groups, ordering a large taxi can work out cheaper.

The public bus Strætó also offers a service several times a day. Route 55 between KEF-Airport and the capital costs just less than Íkr2000 (US$15). Children under 11 ride for free. Strætó also runs bus services within the capital and to towns around the country.

Reykjavík Excursions offers a bus pass to the Highlands during the summer – check timetables as some services run infrequently. Again, compare it to the cost of hiring a car, which could work out cheaper if you are traveling with two or more people.

Go green and save money by carpooling in Iceland

Hitching is never entirely safe, and we don’t recommend it, but some people do hitchhike in Iceland. You will need plenty of patience and weatherproof clothes.

Alternatively, check the carpooling website to organize a lift in advance. It’s generally expected that you’ll pay towards the cost of fuel. And on the plus side, sharing a ride is better for the environment and a great way to meet locals. 

Two children holding hands and looking at Skogafoss waterfall.Get a close-up view of the ethereal Skógafoss waterfall © Maria Uspenskaya / Shutterstock

Explore Iceland’s Ring Road sights (mostly) for free

In Iceland, horizons are dotted with volcanic peaks, gushing waterfalls spring from every crevice, and beautiful coastlines seem to lurk around every bend in the road. Despite discussions over the years on introducing a nature pass system, which would mean some of the country’s natural sites would command a (small) fee from visitors, this spectacular scenery remains mostly free to explore.

Many of the country’s big-name sights are easily accessed from the Ring Road, which circles Iceland. Along the south coast, showstoppers include incredible waterfalls such as Seljalandsfoss, where you can walk behind the falls, and Skógafoss, where rainbows arc through the spray in the sunshine. Other attractions include the dramatic black beach at Reynisfjara near Vík, the massive Vatnajökull ice cap and the Jökulsárlón glacier lagoon, where glistening icebergs journey out to sea, occasionally resting along the black sand beach – dubbed Diamond Beach in English – on the way.

Be aware that parking fees are charged at some sites. The fee varies but is often around Íkr750 (US$6) per day for a regular private car and is used to help fund maintenance of facilities such as walking paths, restrooms, parking lots and service centers. Some places have introduced a fee – up to Íkr200 (US$1.50) – for restroom use.

Young Caucasian man and women  sitting  at the table on the beach in IcelandTo save money on the road in Iceland, pack your own lunch and BYO thermos of coffee or tea © Getty Images / iStockphoto

See Reykjavík and the Golden Circle for less

The most popular day trip from the capital, Reykjavík, is to the Golden Circle. It’s home to the magnificent Gullfoss waterfall, Geysir, the geyser after which all others are named, and Þingvellir, the site of the world’s first parliament.

Reykjavík itself is an enjoyable city to explore, and some attractions are free to enter, including the must-see Hallgrímskirkja church (though there is a charge of Íkr1000 (US$7) to go to the top for views across the city and its rooftops). The iconic Harpa concert hall, the city’s cultural hub, is also worth a visit, even if you’re not shelling out for a performance.

City Walk Reykjavik, meanwhile, offers popular guided walking tours of the city with a pay-what-you-like policy. When getting around the capital, save money by walking, taking the public bus Strætó or hiring a bike (for city cycling, check out Donkey Republic’s day deals).

Bathers in a hot spring surrounded by rocky edgesBlue Lagoon is an iconic Iceland experience, but there are budget-friendly alternatives at local pools © Patricia Hofmeester / Shutterstock

Whale-watching, glacier hiking and geothermal bathing on a budget

From relaxing in the famous Blue Lagoon to high-octane experiences such as snowmobiling, glacier hiking and descending into a volcano, Iceland offers incredible activities. Some can be undertaken independently, although you should prepare carefully as Iceland’s natural environment is both wild and fragile. Tour companies offer a spectrum of activities – some taking in the sights mentioned above – but trips don’t come cheap, so pick one or two you really want to try, and focus on finding the best experience for your money.

If you want to go whale watching, for example, you should do some research into the best locations around the country and compare tour prices. But it’s also worth checking the conditions and optimum times for spotting whales – if it’s not a good time of year to view them, you may want to save your pennies and opt for a different activity.

Also, consider alternatives. Glacier hiking trips from the likes of Skaftafell in the southeast of the country may well be out of your budget, but walking along the edge of the glacier gives you fantastic views without the cost.

Likewise, while the Blue Lagoon (from Íkr8990/US$63) isn’t budget-friendly, you can soak in one of the country’s less-famous geothermal hot spots for a fraction of the price.

Tips to minimize accommodation costs in Iceland

Even basic accommodation in Iceland isn’t cheap. Traveling outside peak season (that is, June through August) will cut accommodation prices significantly. Always try to book early, particularly over holiday periods. In some popular parts of the country, such as the route between Vík and Jökulsárlón, accommodation options are limited.

Join Hostelling International before your trip to get a discount on most hostel stays. Some cheaper accommodations will offer beds without a duvet or blanket for a lower price. BYO sleeping bag.

Camping is not only the cheapest option but also offers the opportunity to wake up in some of the country’s most incredible locations. If you’re here in the height of summer, also bring eye coverings if you want to sleep around the solstice. Ear plugs are also a good idea when campsites are busier and include campervans. 

If you’re traveling as a family or visiting Iceland for a longer period, check out the Camping Card, which gives 28-nights access to designated camping spots all around the country. Wild camping is strongly discouraged in Iceland to help preserve the environment and for your own safety. The weather can be unpredictable, especially during the shoulder season months (April, May and September).

Kaldi Happy hour at Kaldi in Reykjavik, IcelandKeep your eye out for happy hours at Reykjavík bars and soak up the bonhomie © Egill Bjarnason / Lonely Planet

How to reduce the cost of food and drink in Iceland

Food and drink can eat away at your budget, but there are some simple ways to reduce costs. You can opt for accommodation with kitchen facilities and pack a homemade lunch for a day on the road. Eating at home is still not cheap, but you can pick up supplies at cheaper supermarkets like Bónus and Krónan. 

If you’re out and about in Reykjavík, keep your eyes peeled for happy hours. Even cheaper: purchase alcohol at the airport, where it’s tax- and duty-free, making it significantly cheaper than in shops in the city. And, of course, bring a reusable water bottle and drink the tap water. Iceland has some of the purest water of any country on earth.


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