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Iceland Budget Tips: How to Travel Iceland on a Budget

I’ll be honest with you – Iceland isn’t exactly known for being budget friendly. It’s one of the most incredible travel destinations, but costs can add up pretty fast! But, the good news is, it’s definitely possible to travel Iceland on a budget and to see everything without completely breaking the bank.

This guide has some tips to help you travel Iceland on a budget, and some ways to save money on your trip!

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Is Iceland Expensive to Visit?

The truth is that Iceland can be expensive to visit. It’s an island, which means most things are imported, and costs are high. It’s not exactly a budget travel destination, and you can expect gas and groceries to be pretty pricey. But, that doesn’t mean that you have to spend a ton! With these tips for traveling Iceland on a budget, I’ll tell you how to save money and make sure you can see everything that Iceland has to offer without draining your savings.

How Much Does it Cost to Travel to Iceland?

There are so many different ways to travel, so how much you’ll spend on a trip to Iceland really depends on what you do! These budget tips will help you save some money, but to give you an idea of what you can expect to spend, here’s a breakdown of the different expenses you might encounter.

Flights to Iceland

From the US and Canada, flights to Iceland typically range from $600 – $1,000. If you’re coming from another European country, it’ll be a lot cheaper since you’re already closer! I used miles from my Alaska card to fly to Iceland, so the flights didn’t cost me anything.

Rental Car Costs in Iceland

For 14 days in Iceland, I spent $1600 on a rental car. I booked it through Cheap Campervans (and I’ll be honest, it’s cheap for a reason, but the low cost was worth the little bit of anxiety that the slightly broken car caused me). 

I also got super lucky because the prices were in Euros, and between the time that I made the deposit and the time that I picked up the car, the value of the Euro fell a ton – so my US dollars went a lot further. The cost was originally around $2400.

The cost of renting a car ill also depend on what kind of car you get, so make sure to read my guide to driving in Iceland to figure out if you’ll need a 4×4.

A Dacia Duster driving through a lava rock landscape. Renting a car is a great budget tip for traveling Iceland!
read more: Guide to Driving in Iceland

Food in Iceland

I mostly made my own food in Iceland (which is one of the budget tips you’ll read later). Since a lot of groceries need to be imported to Iceland, it does get pretty expensive – but still cheaper than eating out. If you want a few meals out, you’ll spend a little more, but it’s also possible to find cheaper food. I’ve heard the gas station hot dogs are amazing, but I’m a vegetarian so I can’t confirm!

Accommodations in Iceland

I camped the entire time I was in Iceland, and campgrounds usually cost between 1500 and 3500 ISK ($10 – $25 USD) per person. National parks and popular places like Landmannalaugar tend to be more expensive, but overall, camping is fairly affordable. 

If you want to stay in hotels, that will of course be more expensive, but prices vary a ton so you can definitely find more budget friendly options by staying in hostels.

Me in the rooftop tent of our rental car. Camping is one of the best ways to travel Iceland on a budget!

Gas in Iceland

Gas is also very expensive in Iceland, and how much you spend will depend on how much driving you’re doing. Prices fluctuate just like any other country, but the average cost of gas in Iceland is 337 ISK ($2.50 USD) per liter . And if you’re American like me, one gallon is about 3.79 liters – which means gas averages $9.45 per gallon. Very expensive.

How to Get to Iceland on a Budget

Now, let’s get into the tips for traveling Iceland on a budget! The first step is getting yourself to Iceland, so here are a few ways to save money on flights.

Take Advantage of IcelandAir’s Stopover

Did you know that with IcelandAir, if you’re traveling somewhere else, you can stay in Iceland for up to 7 days during your stopover? This way, if your final destination is another country, if you have a layover in Iceland, you can just stay there for a little while. This saves you money because you don’t need to pay for two separate flights – knock out two destinations in one trip instead!

Travel to Iceland in the Off Season

One of the best ways to save money when traveling to Iceland is to travel during the off season. Peak season in Iceland is July and August, so traveling outside of these times can be more budget friendly. Of course, this also has a few disadvantages, since the weather might be a little less ideal during the off season. You also may not be able to take the F roads (mountain roads) into the Highlands, since they close once snow starts accumulation.

But, traveling in the winter gives you a better chance at seeing the Northern Lights, and there will be fewer crowds around, so there are also some benefits, along with saving money!

Find Cheap Flights to Iceland

Flights to Iceland can be expensive if you’re traveling from far away, like North America, but with Going (formerly Scott’s Cheap Flights), finding good deals on flights is super easy! You get deals sent to your email, and there are lots of them each day. The premium subscription is so worth it for me, but even the free version is pretty amazing.

How to Travel Iceland on a Budget

Now, once you’re in the country, here are some ways to travel Iceland on a budget.

Rent a Car

Now, this might not be the best way to travel on a budget for everybody, but it depends on the experience you’re looking for! If you want to stay close to Reykjavik, you can take public transportation to get around, which will be much less expensive than a rental car. 

However, if you want to see more of the country, renting a car is much more budget friendly than taking tours everywhere. I rented a car and camped in it, which is much cheaper than staying in hotels, so overall, this was one of the best ways that I saved money while traveling in Iceland!

Some people also hitchhike when traveling Iceland – it’s a pretty safe country to do that in (I haven’t tried it though), so that’s something to consider too.

Learn to Drive Manual

Here in the US, almost everyone drives an automatic – but learning to drive a manual car will save you a lot of money! Pretty much everywhere you travel, there are more stick shift cars, and Iceland is no different. If you’re renting a car, you can usually rent an automatic – but it costs a lot more. If you’re able to drive a manual, you’ll save a lot!

Camp (and Get a Camping Card)

And speaking of camping, staying at campgrounds is one of the best ways to travel Iceland on a budget. Instead of spending money on hotels, you can stay in some beautiful places for much cheaper! You do have to stay at established campgrounds in Iceland (to avoid damage to nature), so there is a cost – but it’s only about 1500 ISK to 2500 ISK, which is $10 – $25 USD, so it’s much more budget friendly than finding hotels.

A great way to save money if you’re camping in Iceland is to get a Camping Card. This costs €179, and covers up to two people. However, this card is only accepted at some campgrounds, so before you buy it, it might be worth it to figure out where you want to stay and do a little bit of math to see if it’s worth it for you. If you’re traveling solo, it’ll likely be cheaper to just pay for each campground, but if there are two of you and you split the cost of a camping card, this is a great way to travel Iceland on a budget.

Make Your Own Food

Groceries are kind of expensive in Iceland, but not as expensive as eating out for every meal. Making your own food is a great way to save money, so I recommend getting groceries. 

My rental car included a cooler and a camping stove, but if you need to, you can rent these once you arrive in Iceland.

If you have a small backpacking stove already, bring it with you to Iceland!

Learn the Currency Conversion

The first time I went grocery shopping in Iceland, I had forgotten to look up the currency conversion for ISK to USD. I had a wifi hotspot in the car, but no phone service in the grocery store, so I ended up just getting whatever groceries I needed. I later learned that I spent about $5 on an avocado… which I wouldn’t have done if I realized!

So, this might seem like a silly tip, but it’s one that’s easy to forget. Before you go anywhere in Iceland, look up the current conversion rate, and do your best to memorize it. And use your calculator app in the grocery story if you need to! 

At the time I was in Iceland, 10000 ISK was a little less than $7 USD, so I would round up to 7 and use this to do the math.

Visiting free places like this is a great way to travel Iceland on a budget.

And the Metric System

But, the tricky thing is that even if you know the currency conversion, there’s a little more math required if you’re an American like me, or otherwise unfamiliar with the metric system. So, it can definitely be helpful to get a little bit familiar with it before you visit Iceland, or have a chart handy when you go shopping. Learn what an ounce is for grocery shopping, and what a liter is for filling up at the gas station.

Visit Free Places

Some hikes, hot springs, and viewpoints (and of course museums in cities) in Iceland require a fee, so if you really want to save money while you’re in Iceland, I recommend looking up the places you want to go first and seeing if there’s a cost. There are plenty of hikes and places that are free to visit, so don’t worry, you won’t be missing out too much! Especially as you get farther away from Reykjavik and the Ring Road, you’ll find fewer paid parking areas in places that are more off the beaten path.

Some places that are free to visit include the Seljavallalaug Swimming Pool, Askja, and Múlagljúfur Canyon.

A free hot spring on the side of a cliff in Iceland - visiting free places like this is a great way to travel Iceland on a budget.

Bring a Water Bottle

You should always bring a water bottle anyway, because being hydrated is important, but it can also help you save money in Iceland! There are plenty of places where you can fill up on water (and Iceland has some of the cleanest drinking water), so bring your own water bottle to refill instead of buying water every time. 

I packed a collapsible water container – since I had a rental car, I could keep it in there which was super convenient and ensured that I never ran out!

Travel With Someone

One of the best tips for traveling Iceland on a budget is to travel with someone else. Having a travel buddy means you can split some of the costs, like gas and the rental car, saving you both a lot of money! 

Ready to Travel Iceland on a Budget?

If you’ve been to Iceland, and have any of your own budget tips, or if you have questions about anything, leave them in a comment below! For more tips about traveling in Iceland, check out this guide about camping, and this one about driving.

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