Iceland is one of the last countries to be travelling on a budget. Not because it is impossible, but because everything is so expensive. But there is always a solution. Here’s some tips to travel Iceland on a budget and all the secret cost cutting methods to experience the real Iceland with a tighter belt.
This is another budget guide on how to travel an expensive country on a budget. We covered Japan on a budget the last time.
The article will be split into the sections as follows:
Flights are always the bulk of any travel expenditure. If you are interested to travel to Iceland in general, create an alert with Skyscanner, Kayak, Momondo and AirfareWatchdog. Book in advance, always.
But more importantly, look out for layovers. We used to have WOW Air and the great deals, but they have stopped operating.
So check out Icelandair instead, for flights between major cities (E.g. USA to UK) and a stopover in Reykjavik. Sometimes, the airlines offer multi-day layovers in Iceland. So you get to extend your trip by exploring Iceland.
To experience Iceland on a budget, use long layovers instead of booking a trip directly to Iceland. You get to explore 2 countries for similar prices!
The Golden Circle in Iceland is the route between 3 natural attractions in Iceland: Þingvellir National Park, Geysir geothermal area and Gullfoss waterfall. The Golden Circle covers all 3 landmarks at 230km. You don’t need a tour, you can just rent a car and go.
Snæfellsjökull National Park
The Snæfellsjökull National Park is a 2h drive from Reykjavik, and one of the most popular Instagram spots in the whole of Iceland! There, you get to see Snæfellsjökull (Snæfell Glacier), Djúpalónssandur beach, Saxhóll volcano crater, Lóndrangar the two massive lava formations, Sönghellir (the singing cave) and Rauðfeldargjá the hidden waterfall.
If you are like most travellers, you’re probably driving a car and on a road trip around Iceland. Hotels are really expensive and they are not good for our “Iceland on a budget” theme. But there are ways to reduce your travel cost through creative accommodations.
Here are the basic options for you:
- Sleep in the car. Drive to a nice and quiet spot, get a light and warm sleeping bag and sleep in the car. Bonus: you get to wake up to a beautiful sunrise, if you face east!
- If you are up for it, rent a camper van. You get a more comfortable sleep and it is both your transportation and accommodation. You can park your van in the campsites. Some provide basic necessities for a nominal fee, and some are free for you to spend the night.
- There are hostels and camp sites, for sure. Check out this map with hostels and camping sites around Iceland or the latest deals available.
Trevellers tip 2: A good tip is to check the hotels after 7 pm, as they usually have deals too.
- Swimsuit: look out for natural pools other than the Blue Lagoon. There are plenty of cheap geothermally heated swimming pools!
- Raincoat & Fleece: it will still be cold and rainy during the off-season and summer season
- Good trekking shoes: especially good hiking boots. You will be doing quite a bit of hiking and climbing.
- T-shirt: something light to layer up with
- Sunglasses: it gets really sunny, especially in summer
- Drone: drones are legal and many people fly their drones in Iceland
This will be another big chunk of your travel cost in Iceland. To travel Iceland on a budget, renting a car is the cheapest way to get around. Travel during low season (Mar-May) for a better price in car rental: international rental brands have similar prices as local brands with better perks.
Please consider gas mileage when renting a car: fuel efficiency is very helpful for the bank account.
Research, research & research! There is no one “best car rental in Iceland”. Check all options available before hiring the car. Negotiate prices when you have done your research. Every “best car rental in Iceland” is a lie because they might be needing the car from a different reason as you (speed vs fuel efficiency vs comfort). Please research wisely.
Trevellers Tip 3: if you can handle the stick, get it. Manual car is a lot cheaper to rent in Europe than automatic, since there are a lot more manual cars. If you need an automatic, please book them in advance!
Practical Driving Tips
- Practice safe driving, especially when it’s winter and roads are slippery!
- Check the conditions and weather before your trip: Vegagerðin, the Icelandic Road and Coastal Administration. If a road is closed, go your ass out. You don’t want to die.
- Drive ON THE DAMN ROAD. Fine for driving off road: 500,000 ISK (US$4,800).
- Don’t stop on the road randomly.
- Check the road conditions that you want to visit. Some roads are bad gravel roads, muddy from the snow/rain, etc. Get a 4×4 if unsure not a tiny little winny car.
- Not really trustworthy because of the road conditions.
- Stay within the speed limit. Lots of speed camera around. Look out for “Löggæslumyndavél” signs, which means speed camera.
- 90km/h on highways
- 70km/h in tunnels
- 80km/h on the rural gravel road
- Fines are payable ON THE SPOT with credit/debit card. Otherwise, free ride in a police car!
- Gas is really expensive. Plan your route in advance so you don’t do a detour and waste fuel. This is a helpful gas station map.
Now, food is expensive. So here are 3 tips to reduce the cost of meals for your trip.
- Eating out is expensive. Since you’re doing a road trip, maybe visit Krónan and Bónus to stock up on food before you start your trip.
- The only place to buy alcohol other than bars: Vínbúðin. Buy them before you start your trip. NO drinking & driving!
- You’re driving, so you need to know this. Buy gas at Orkan, ÓB and Atlantsolía.
As for diet specific, eat lots of staples to start your day. If you are going to be hiking and walking a lot, get oatmeal, dried fruit and nuts and energy bars with you.
Trevellers tip 4: Some simple meals on the go for you and simple recipe.
You want them light, easy to carry around, cheap and gives you energy. If you can bring them with you on your trip, that would be cheaper too.
Most people travel to Iceland in hopes to see the northern lights. However, there are some conditions before you can see the northern lights.
- There has to be aural activity.
- Sky needs to be clear. Aka good weather.
- Needs to be really dark outside. Aka Nov-Feb.
Iceland may be expensive in the travel aspect, but it is free when it comes to activities! Iceland is renowned for its beautiful and stunning nature. Thankfully we get to enjoy nature for free.
Drive up to the waterfalls, swim in lagoons, hike up peaks and take a dip in the sea. Most activities are easy to get to and you don’t need a guide. Here’s a map of the recommended activities and things to do.
10 Stunning Nature to Visit in Iceland
- (Waterfall) Urridafoss: The most voluminous waterfall in Iceland, about 50-55 minutes from Reykjavik.
- (Waterfall) Seljalandsfoss: 60 meter tall waterfall at the base of the Eyjafjallajökull glacier.
- (Waterfall) Skogafoss: 60 meter tall wide flowing waterfall between Seljalandsfoss and Vik on the southern coast of Iceland.
- (Beach) Reynisdrangar: One of the few areas in southern Iceland where you can walk along the Black Beach safely.
- (Canon) Fjaðrárgljúfur: A gigantic canyon system in southern Iceland, between Vik and Skaftafell.
- (Glacier Lagoon) Jökulsárlón: Large chunks of white, gray and blue glacier float around in pristine blue water at the Glacier Lagoon. That is also the deepest lake in Iceland.
- (Waterfall) Hengifoss: At 128 meters, the third highest waterfall in Iceland. Also surrounded by basalt (like Svartifoss), but with streaks of red clay.
- (Natural Geothermal Heat) Viti Crater: This crater was formed during a massive eruption at the start of the Mývatn Fires in 1724.
- (Natural Geothermal Heat) Grjotagja: A small underground cavern about a mile from Myvatn filled with hot sulfur water.
- (Gorge) Rauðfeldsgjá Gorge: A fissure in a massive cliff face, the Rauðfeldsgjá Gorge allows you to quickly ford a shallow creek to enter into the cave.
- Needless to say, the first thing is to visit during off season. That is the quieter months, during Mar-May. It’s also warmer because it’s springtime with some possibility of rain and snow.
- Don’t use cash, use cards. Iceland mainly uses debit/credit card
Other Websites & Resources
Trevellers is my way to change the world. Through my stories, tips and lessons learnt, I truly hope to inspire you to get out of your comfort zone, see the world and see who you truly are. Travel is more than just taking a selfie at beautiful destinations. Travel is an adventure, where you can truly become who you are, give you the time to reflect and grow to become the person you’ve always dreamt of.