Traveling to Iceland on a Budget

Iceland, a Scandinavian island-country, never fails to enchant visitors. With its dazzling northern lights, humongous glaciers, jaw-dropping geysers and volcanoes with unpronounceable words (try saying “Snæfellsjökull”), it’s undoubtedly one of the world’s best destinations.

However, Iceland is also known for its incredibly high prices. So it is not exactly a budget-friendly country, but this what makes it more appealing. Many tourists – especially backpackers – view such an expensive country as Iceland as a great challenge. For the unprepared, though, the crazy high cost of living in Iceland will come to them as a shock.

While you do have to pay more for your day-to-day expenses than you would in any other country, traveling on a shoestring in Iceland is possible. Quite difficult, but possible. You just need to be creative, resourceful, and most of all – mindful of your spending, unless you have extra wads of króna at hand.

Ways to make the best of your budget in Iceland

1. Travel in groups

One of the tried-and-true ways to cut expenses while traveling to Iceland is by going in groups. You can split costs for your lodging, car rental, and food and drink. Exploring Iceland by going in groups is a lot cheaper than exploring the country alone as a solo traveler.

However, if you are planning for a solo tour in Iceland, don’t be deterred by its high prices. Iceland is an incredible country, and its natural landscape will always charm and enthrall backpackers, solo, or in groups. But if you have to travel there alone, you need to have a bigger budget for your day-to-day expenses.

2. Visit as a layover


One of the best options of traveling to Iceland on a budget is visiting the country as a stopover. Icelandair offers its passengers a day, or even a couple of days, of visiting the country for little or even no extra cost! The national airline has been doing this for decades as a way to promote tourism in the country, and it has been a mainstay ever since. Icelandair’s marketing ruse has proven to be quite popular, especially with foreign tourists.

It is also a great option if you have just enough time to visit the country, so you really have to squeeze all famous tourist spots as possible within 48 hours or less. But you don’t have to worry, because there are so much to see in Iceland’s capital, Reykjavik, and the outskirts. You can explore the famous Blue Lagoon and Ring Road in 24 hours!

If you’re traveling to Iceland on a budget, look out for cheap flights on Icelandair – the airline often offers incredibly affordable flights from the US to Iceland.

3. Make your own food and find cheap eats

Yes, we know that one of the best ways to experience any culture is to sample its cuisine and to go out to different restaurants and cafes that offer local fares. But if you’re on a budget, eating out frequently is expensive. The option is to go shopping at the groceries and supermarkets for ingredients and cooking them back at the place you’re staying.

Depending on the itinerary, you can also make a packed lunch or cook your own lunch or dinner before leaving. If your accommodation includes a kitchenette, then good for you. Tap water in Iceland is pure and safe for drinking, so make sure to have a non-disposable bottle and fill it with water before going out.

But if you really want to eat without preparing food, one of the smart ways to do it is to book accommodation which includes breakfast. This is also a great way to save money. You can find a few number of accommodations in Iceland that include an all-you-can-eat breakfast, with unlimited coffee. If you fill yourself up in the morning, you only need to eat light for midday snack before dinner – or not eat at all, if you feel quite full enough to get you throughout the day.

You will also save a lot of money by staying at bed and breakfasts than staying at expensive hotels. Search for guest houses that serve breakfasts.

If you don’t mind your health for a while, you can buy one of the cheapest fares in Iceland – hot dog sandwiches, from the hot dog stalls that dot throughout the cities. They are perfect for eating while you’re on the go.

4. Don’t drink alcohol or buy it at duty-free stores

A few people do not drink alcohol, but more people do. If you are the type of traveler who would like to have a swig, your budget will definitely go through the roof in Iceland! Alcohol is one of the biggest expenses in Iceland due to high taxes on beers, wines, and spirits. Yes, this country would like to keep its citizens as sober as possible.

The best way to get around is to buy alcohol from duty-free stores upon arrival at the airport. Otherwise, you would have to put your drinking habits off for a while during your visit – it can be good for you, actually! You don’t want to sleep drunk and miss out on the great sights and experiences during your stay in Iceland.

5. Become a member of Hostelling International

This is going to be a blessing for backpackers! Most hostels – especially outside of Reykjavik – are affiliated with the Hostelling International group. These hostels give discounted rates to members by at least $5 per night. The $28-a-year membership will pay for itself in no time. You can apply for a membership at the hostel or online before you embark.

6. Take a free (or cheap) walking tour

Iceland is known for its breathtaking natural beauty and wonder, great architecture, and nice and clean streets, and you get to experience a lot of them for free!

If you are new to the city, one of the best ways to commence your trip is to take a walking tour around Reykjavik and other cities such as Kópavogur and Hafnarfjörður. You will get to see the most popular tourist spots, learn a bit of history about them, and get to know about Icelandic culture. Aside from the Blue Lagoon, there are other lagoons that are free (or at least, cost less than the Blue Lagoon) such as Hotpot Iceland and Reykjadalur.

7. Couchsurf

The Couchsurfing community is very much alive and well in Iceland. Many of the hosts are expats living in the country, but it’s still a great way to save some money, meet great people, and get firsthand insights from the locals. Icelandics are wonderful and welcoming people. And yes, they speak fluent English too, as English is taught as a second language there.

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