Tips for traveling Iceland on a budget

Iceland is a top destination for all kinds of travelers. However, it can be expensive. Although you will need to have more money to cover daily living expenses, it is possible to visit the island on a tight budget.

These are my top tips to help you save money on your Iceland trip!

Iceland Layover

Iceland Air offers a free stopover. This is a natural route between North America & Europe that allows you to visit one of the most popular travel destinations in the world for a few days.

You don’t have to travel far to see Iceland’s main attractions. In 24 hours, you can visit the Blue Lagoon and the Ring Road.

Icelandair often offers very affordable flights from the U.S. to Iceland, so if you are on a tight budget, Icelandair is a good option.

Iceland Group Travel

Planning a group trip to Iceland can be a great way to save money. Splitting the costs of accommodation, car rental and food will make Iceland more affordable than if you were to travel alone.

Don’t let the high prices discourage you from planning your Icelandic solo trip. Iceland is a wonderful country to explore solo, you just need to have more money for your daily expenses.

Get Duty-Free Alcohol

Alcohol will be one of the biggest expenses you’ll have in Iceland. You’ll pay a lot more to get a drink in Iceland than you would at home due to the high taxes on spirits, wines, and beers.

This can be avoided by buying alcohol at duty-free shops upon arrival at Keflavik International Airport. To cut costs, you can take a “dry” vacation.

Make Your Own Food

My first trip to Iceland was in an Airbnb. On my second trip, we hired a campervan. Each time, I cooked two meals per day.

Skyr yogurt is a delicious Icelandic breakfast option. I would then make lunch, depending on what I had planned for the day.

You’ll be able to spend less on dining out at restaurants and cafes if you limit your daily intake.

Bed & Breakfast

Staying in Bed & Breakfasts is a great way to save money on your travels. You can save money by looking for guest houses that offer breakfast so you don’t have any worries.

Visit the Blue Lagoon

Consider the Myvatn Nature Baths if you are planning on doing the Ring Road.

If you are determined to visit the Blue Lagoon, the “Comfort Level” package is the best option. This package includes your base admission and allows you to use the entire lagoon with no restrictions.

I recommend that you go early in the morning to get the best value for your money and then stay until it closes.

Seljalandsfoss waterfall

Get Tap Water

Iceland boasts some of the purest water in the entire world. It is possible to drink from any tap or stream that you find in Iceland.

Make sure to pack a reusable water container when packing for Iceland. You will be able to save a lot of money!

Take advantage of the free activities

Iceland has a lot of geothermal hot spots! This is one of my favourite things about Iceland. Hot Pot Iceland has a complete list of places where you can relax and enjoy the warm water.

These are some activities that you can add to your bucket-list:

  • Visit the Sun Voyager
  • Explore Reykjavik’s street art scene
  • Wander around Ellidaardalur Valley
  • Try to see the Northern Lights from further north.
  • Reynisfjara Black Sand Beach
  • The wreckage of the US DC-3 Airplane can be viewed here
  • Meet Icelandic horses

Jokulsarlon Glacier Lagoon

Rent a Car

Renting a car to drive the Ring Road and Golden Circle on your own can often be more affordable than joining a group tour. If you don’t plan to complete the entire Ring Road, joining a tour can save you money. Instead, base yourself in Reykjavik.

Compare the prices before you book a tour or rent a car. This will help you determine which option is most affordable for your itinerary.

Iceland during the Low Season

Iceland is a popular place to visit all year round, but some seasons are more expensive than others. You can save as much money as you like by traveling to Iceland in winter (November-March).

The Ring Road will not be open to vehicles in winter, as the roads are snowed in. You can still visit Reykjavik and have better chances of seeing the Northern Lights.

Iceland’s shoulder seasons are the best time to visit if you want to avoid snow. You’ll see fewer people at top attractions, as room rates drop from September to October and April to May.