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How to travel Iceland on a budget

written by Julie Faye Germansky December 3, 2017
Skogafoss waterfall Iceland on a budget

Iceland is hot on travelers’ radars – that’s a fact, not an opinion. We all know at least one person who has hopped on a plane to experience the unparalleled beauty for themselves. 

But, relatively cheap plane rides sadly contrast with the quintessentially Nordic prices you encounter upon arrival. (The cost of living is high, and most restaurants and accommodation options cost either the same, if not more, than in capital cities like London and Paris.)

That said, Iceland on a budget can be more of an effortless journey than you might expect. You just need to be conscious about your spending (and take on board these tips)!

iceland on a budget

Collage of colorful houses in Iceland’s capital city, Reykjavik.

An Icelandic adventure is more than worth it. Promise. Without further ado, here’s what you need to know to really make the most of it.

Be selective about the restaurants you eat at

Food in Iceland is arguably the root of the country’s costliness. A simple sandwich can set you back around 1200 ISK ($15).

This goes to show the importance of picking the right restaurants so you get good value for your money. Be mindful! Eating out will take a chunk out of your budget at most restaurants in major cities if you don’t choose wisely. Look for accommodation that includes breakfast, if at all possible.

Fresh fish in Iceland is too good to pass up, it’s one of the few specialties of the country’s food scene.

iceland fish market

Fresh fish at a market in Iceland.

To enjoy the freshest of fish without a high price tag, seek out a place like Restó in Reykjavík. Its sumptuous fish soup and fresh catches of the day are wallet and pallet pleasers, each for around 970 ISK ($12). For a more rustic experience, enjoy a the king of comfort food — a juicy burger at Vitabar. At this small local spot you can enjoy a cheeseburger and fries for 650 ISK ($8) or alternatively a beef steak, fries, salad and a large beer for 1,700 ISK ($21).

READ MORE: 6 EXPERIENCES EVERY TRAVELER SHOULD HAVE IN ICELAND

Prepare food for when you’re on-the-go

Pack yourself food before jumping on a long-haul bus ride to somewhere remote like the Westfjords, Iceland’s final frontier. Instead of splurging on a 800 ISK ($10) can of Pringles at small shop to stifle your hunger, hit up the supermarket. The food store chain Bonus – recognizable by its large pig logo – is a great spot to get snacks and sandwiches.

Iceland vik

The remote seaside town of Vík í Mýrdal

Alternatively, you can opt for a hot dog at a world famous hot dog stand. Located in downtown Reykjavík is Bæjarins Beztu Pylsur, which directly translates to “best hot dogs in town.” Since its conception in 1937, it has been visited by people of the likes of Bill Clinton and Metallica.

It’s the quintessential Iceland street foodie experience that often surprises travelers. Here, hot dog vendors are not a rare site — you’ll find them roadside, in major cities and in small villages. What differentiates these dogs from others? It’s all in the mayo-based secret sauce. They may very well be the key to traveling Iceland on a budget since they only cost around 300 ISK ($3.50).

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Pack for the weather

It’s such a bummer when you get hit with easily avoidable extra costs, taking money out of your budget from things you actually wanted to spend on. Here’s a tip: bring your own sheets and sleeping bag for hostels and alternative accommodation. Not bringing them is a simple mistake that can cost you upwards of 800 ISK ($10) each time you relocate.

budget iceland northern lights

Bundled up traveler under the Northern Lights.

In efforts to keep warm, make sure you bring layers! It’s cold. Very cold. Iceland is not the place where you want to leave extra room in your suitcase to pick up an expensive souvenir sweatshirt to keep you warm. It’s necessary to be outfitted properly when you’re hanging around in the darkness in the countryside, waiting for the Northern Lights to put on a (magical) show.

READ MORE: A PHYSICISTS GUIDE TO ICELAND’S NORTHERN LIGHTS

Bring a refillable water bottle

In the land of free-flowing waterfalls and glistening icebergs, you can bet the tap water is safe and pure to drink. Bring a refillable water bottle! Not only will this reduce your environmental impact, but it will reduce your spend. Just make sure when replenishing your water bottle that the tap is turned to cold water. Hot water in Iceland is high in sulphur (geothermal energy is used to heat around 90% of Iceland’s homes).

Buy alcohol in the airport

Another liquid that can quickly drain your budget is alcohol. If you like to enjoy a drink, be wary of wines and spirits that can cost upwards of 800 ISK ($10) in Iceland.

Expect that in cities like Reykjavík, known for having a lively nightlife, that locals don’t head out to bars until around 12:30am.

Reykjavik iceland on a budget

The bustling city of Reykjavik.

So, take advantage of being at the airport, by buying tax-and-duty-free alcohol for a much cheaper price. Enjoy, and head out on the town.

Cheeky tip: bring a flask to ration out your alcohol, especially if you’re camping.

OFF-PEAK VISITS ALSO MEAN CHEAPER PRICES; HERE’S WHY ELSE TO VISIT IN WINTER

Venture to lesser-known lagoons

It seems that there’s a pattern… the more people enjoy the same attraction, the higher the prices. Well that’s the case for the Blue Lagoon which costs around 5000 ISK ($60) for a single, basic entry.

Iceland on a budget Blue Lagoon

The Blue Lagoon

Instead of heading straight there, it’s hardly a compromise if you head to lesser-known hot springs like the stunning Reykjadalur (translated to “steam valley”). Even better, it’s just a 40-minute drive out of Reykjavik. This remote, steaming river is a natural gem and as such, you aren’t charged an entrance fee.

READ MORE: 6 HOT SPRINGS IN ICELAND MUCH BETTER THAN THE BLUE LAGOON

Cash in on free activities

Take advantage of the wonderful outdoors with its free activities built into nature. You can admire Jökulsárlón glaciers from the shore of the lagoon, (luckily a tour is included on Intrepid’s 6-day Northern Lights Escape). You can just as well visit the seaside village of Vík í Mýrdal. Its massive basalt stacks border the black sand beach of Reynisfjara. The naturally formed columns are so remarkable that they look hand carved.

Arguably one of the best experiences for traveling Iceland on a budget is hunting down the incredible waterfalls across the country. Contrary to the popular song lyrics “don’t go chasing waterfalls”, we don’t take the advice literally and recommend quite the opposite. One of many natural beauties is Seljalandsfoss waterfall, where you can walk behind the thundering falls and witness a misty rainbow.

READ MORE: 7 BEST WATERFALLS YOU SHOULD VISIT IN ICELAND

Gullfoss waterfall Iceland on a budget

Gullfoss waterfall

While in Reykjavik visit the iconic Hallgrimskirkja church – free to admire unless you want to venture up the tower. You can also visit a wondrous nature reserve in Iceland’s capital, called Elliðaárdalur. Spot wild rabbits and wander along the churning Elliðaá river. Its fantastic proximity to the city center is really something to take advantage of to stick to your budget.

And if all else fails, you can always grab a coffee at one of Reykjavik’s many quirky cafes. Get cozy and marvel at the abundant, otherworldly beauty you’ve been lucky enough to witness.

You’ve got the budget-savvy tools, now put them in practice on one of Intrepid’s small group adventures in Iceland.

(All images c/o Intrepid Travel.)

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7 comments

Dota March 2, 2019 - 12:47 am

What an amazing guide, I love it. For a budget travelling enthusiast that I am all of this is very useful. Some great tips 🙂

Reply
Dylan Wright July 18, 2018 - 4:53 pm

Tell me how things are with the transport? I read that in Iceland it’s best to rent a car. Tell me this is true?

Reply
Maria May 24, 2018 - 1:48 am

Used Airbnb and stayed on edge of city centre for a reasonable cost compared to hotels. If coming from Europe, you can bring in a lot of food in your luggage, including some fresh food items. Fresh fruit, veg and meat is expensive as are eggs. I took in rice, pasta, breakfast cereal and snack food, packet sauces/bases etc so that I only needed to add a few fresh ingredients and didn’t have to stock up on basics. Frozen veg were reasonably priced. This then allows you to splurge on eating out to try some local dishes. Local bus travel doesn’t save you much and you see more on organised day trips.

Reply
Stephen Christie May 11, 2018 - 7:33 pm

I lived in Iceland for three years. It’s really a very beautiful place to live as well as visit. Awesome weather, best meal at cheapest price as well as an amazing place for shopping. It was really a very nice experience to live there.

Reply
Anonymous January 13, 2018 - 7:05 am

Lived in Iceland for three years. It really is a beautiful island. Lamb dogs with the onions are about the cheapest meal you can get in Iceland. For a really fun experience and one that costs nothing be there when they are rounding up the sheep, so much fun!

Reply
Alli December 20, 2017 - 5:30 am

Cost – ridiculous. Weather – often atrocious. Hot dogs – excellent. Scenery – absolutely jaw dropping.

Great tips – especially shopping in Bonus, which will save you a fortune.

Reply
Remedios T. Yambao December 16, 2017 - 2:30 am

Excited to visit Iceland in 2018 !

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