Easy Guide to Surviving Iceland on a Budget

Iceland has the reputation of being an expensive place to both live and travel to. While there is some truth to this, it doesn’t mean you have to spend a fortune to have a nice holiday here. There are ways to minimize your costs and still experience all the great things that Iceland has to offer. So listen up! Here is how to travel in Iceland on a budget.

How to Keep Your Costs Down on an Iceland Holiday

Here are some ways to reduce your expenses in Iceland if you’re trying to be friendly to your wallet. A holiday isn’t necessarily about spending a lot of money, after all; it’s about exploring your destination.

Hire a campervan.

This is a great money-saving tip for two reasons. Firstly, rather than joining tours to take you to the sites you want to visit, you can drive there yourself. Secondly, renting a camper means you won’t have to worry about booking hotels or hostels as the vehicle itself will be your resting place. Not to mention campsites in Iceland are always cheaper than indoor accommodation.

Buy your food at supermarkets

Eating out is rather expensive in Iceland, so save this for when you really want to splurge- maybe for one or two meals depending on the length of your trip. The most affordable supermarket is Bónus, and there is one in most Iceland towns, as well as several in Reykjavík.

Take the bus instead of a taxi

If you’re out late in the city and don’t want to use your rental vehicle, get a bus into town. Taxis are very costly here, and Iceland does not currently have Uber or other services like it. The bus network covers the Capital Region well and runs until late, so you’ll be able to get around fine with it. Plus, more good news! The price for one ticket is only ISK 490.

Park your vehicle outside of the city center.

We’ll be honest- the price for parking in central Reykjavík is not cheap, but fortunately, you can find parking completely free of charge a bit further away. Use this as an opportunity to explore the capital on foot.

Buy the clothes you need before your trip.

You don’t want to get to Iceland and find you haven’t packed properly, especially with how much this country’s weather varies. Be prepared with plenty of warm, waterproof clothing, a swimming costume, and a towel. It’s likely that these items will cost more in Iceland than in your home country.

Affordable Trips You Can Take in Iceland

As long as you have your RV rental, there are Icelandic trips you can take that will cost you very little. In fact, aside from food and gas, some will essentially cost you nothing. For this reason, it’s best to prepare food to take with you, to avoid buying it along the way. Let’s take a look at a few of the best trips to add to your itinerary.

The Golden Circle

You’ve probably heard of this one already as it’s Iceland’s most famous tourist route. Apart from the parking fee for Þingvellir National Park, should you choose to enter, there are no extra costs for touring the Golden Circle. Additionally, entry to Gullfoss waterfall and Geysir Geothermal Area (the other two main stops) are both free.

Snæfellsness Peninsula.

This area northwest of Reykjavík contains Snæfellsjökull National Park, which is free to drive around and explore. The peninsula has an abundance of hikes, beaches, and beautiful sites to visit, none of which have a fee associated with them. It can also be driven around in a day, provided you leave early in the morning.

The South Coast of Iceland

Driving counter-clockwise along the Ring Road (Route 1) will take you to incredible waterfalls and glacial lagoons. Apart from small parking fees at some sites, you can keep your costs down with this trip, too. Visiting Seljalandsfoss, Skógafoss, Svartifoss, Vík, and Jökulsárlón are all highly recommended.

Visiting wild hot springs

Rather than paying to enter a pool or spa, you could go full-on wild and experience Iceland’s heated water for free. Some well-known sites are Reykjadalur hot river, Seljavallalaug, and Krosslaug pool. Note that because these are wild, the water’s temperature is not regulated, so check before climbing in.

Hiking up Mount Esjan

Although seeing the Capital Region from the top of a church or museum is amazing, why not aim to get even higher? Esjan is the mountain range that overshadows Reykjavík. It’s only a short drive from the city and the hike is not too difficult.

Where to View the Northern Lights Without Paying for a Tour

Yes- it is possible to see the gorgeous Icelandic Northern Lights without paying for an official tour. Two sites we always like to recommend that are close to the city are the Perlan hill and Grótta lighthouse.

Perlan is Iceland’s natural history museum; it is a giant circular building that sits atop a hill overlooking Reykjavík. While the museum has an observation deck you can pay to use, you can also walk up the hill yourself. Although there are artificial lights around you, you can still see some incredible northern lights shows from here.

Grótta lighthouse is only a ten-minute drive from downtown Reykjavík, but it gets you away from the city lights. From here you have a great view of the Atlantic Ocean and the bay. If the sky is clear, the stars and maybe even the majestic Northern Lights will be revealed to you.

If you are happy to go a little further to hunt the lights, get yourself out of the Capital Region and drive east towards Selfoss or north towards Mosfellsbær. With this, you’ll leave most of Iceland’s population behind.

Useful Apps to Save Money in Iceland

The Reykjavík Appy Hour app was designed to tell visitors where and when they can get the best drinks deals. On this app, you’ll find listings of bars in the city and what offers they have on certain days.

Referring to the topic above, download the “My Aurora Forecast” app for Northern Lights guidance. The app will give you an idea of the most likely times and locations that the lights will appear. Keep in mind that it’s impossible to predict nature’s movements with 100% accuracy, but the app will point you in the right direction.

Since we recommended taking the bus for late-night trips, download the Stræto app. This is the easiest way to buy and use bus tickets in Iceland. But keep in mind that bus drivers don’t take card payments and, while cash can be used, change is not given. Also remember that once you’ve bought a ticket on the app, it’s valid for 75 minutes.

Traveling Solo on a Budget

If you’re in Iceland on a budget solo, there are, of course, different considerations. You won’t be splitting gas and food costs, or getting group deals on meals and excursions. But everything above still applies to you, as these suggested trips and ways to save money work for individuals as well as couples and groups.

Hiking is always free and it’s a great way to make the most of your alone time. All of the national parks in Iceland have a trail map at their entrance, with miles of hiking available. You could spend your days traveling from waterfall to glacier to volcano, without the need for a companion or cash.

Traveling Iceland on a budget

Traveling Iceland on a budget is absolutely possible. You just need a little forward planning and awareness of what supplies you’ll need and where to purchase them. At the end of the day, you don't need to pay for expensive excursions and pricey accommodations to enjoy Iceland because a holiday here is about exploring the wild outdoors.

Secure your rental campervan today and you’ll have taken a big step towards surviving Iceland on a tight budget!

Samuel Hogarth, Campervan Reykjavík