Tips for Exploring Iceland on a Budget

Updated: Jan 26

It is well known that Iceland can be an expensive country to travel in. The cost of living on this remote island way up in the North Atlantic is indeed quite high. Services, food, drink, and fuel – they all add up. However, there are ways and means to travel through this beautiful country on a tighter budget. We have covered lots of ideas in this blog. From transportation within the country to eating and drinking while you are here.

We do think that the number one way to save money on a trip to Iceland is by hiring a camper van. After all you will have somewhere to sleep, cook and hang out on your road trip, as well as transportation. Having said that we have plenty more travel hacks that apply to all travellers. Whether you hire a camper, rent a car, travel on public transport or on an organised tour. In this post we share some great tips and hacks for exploring on a budget. We promise, travelling to Iceland doesn’t have to break the bank!

View from the back of a camper van out across a green landscape. Camping is a great way to see Iceland on a budget

When is the best time of year for a budget trip?

With this one it is a case of swings and roundabouts. Winter is low season in Iceland, so prices for accommodation and vehicle hire are more budget friendly. However, with the wintery conditions you will need to spend more on food and fuel. With the shorter nights and colder temperatures, it will not be as easy to camp. Therefore you are likely to want to book into a more costly hotel. Also, with more hours of darkness you will probably spend less time out doors. Thus you are more likely to spend money on entrance fees, shops and restaurants.

If you travel in high season, from June to August you will pay more for your camper hire and campsites. However, this is the prime time to go camping in Iceland. With all the daylight hours you will have so much to see and do out and about in Iceland. And so many of these activities will be completely free. Hiking, walking, picnicking, sightseeing and generally enjoying the great outdoors doesn’t have to cost a thing. It is also the most comfortable time of year to tent camp or to camp in a motorhome. Temperatures are at their mildest and the rainfall is at its lowest.

Many people argue that the shoulder months of May and September are the best times to travel Iceland on a budget. There is certainly something to be said for this. These months are not considered high season, even though the weather and the daylight hours can be quite similar to June or August respectively. With this in mind hiring vehicles and booking into hotels and campsites is a little less money. Often prices will be set at low season level, although some places might have a sliding scale. Also, the weather is still generally mild and calm enough to tent camp comfortably and to camp in a motorhome.

Girl in a yellow coat sitting and enjoying a view across a black sand beach. Nature is free. Iceland on a budget

Where to stay

Hotels in Iceland don’t come cheap. Hiring a campervan easily solves this one though. There are campsites right around the country, including in the capital city Reykjavik. Even if you are a solo traveller and would like to do some travelling it is much more budget friendly to book a small rental camper or van. You might also consider Iceland car rental paired with tent camping.

If you would like to stay in a bricks and mortar building then check out HI Iceland. This is a not for profit organisation offering hostel accommodation. They have an excellent network of over thirty places to stay across the country, including in Reykjavik. Solo travellers and groups alike can book really reasonably priced bunk bed stays in some interesting and characterful buildings.

Eating on a budget

One great way to save money in Iceland is to prepare and cook your own meals in your camper van kitchen. You can stock up on dried goods and fresh veg in grocery stores when you pass through towns and villages. Then cook up a storm when you get to your campground. The same idea works for summer picnic lunches. Just buy some simple ingredients in a grocery store and fuel up outdoors. For on the go eating, the snack of choice in Iceland is the hot dog. You can enjoy budget friendly hot dog snacking right across the country.

Another money saving tip is to drink the tap water in Iceland. There is no need to keep buying pricey bottled water when the tap water in Iceland is so fresh and delicious. In fact it might just be some of the purest drinking water in the world. Simply fill up your water bottles at local cafes, bars and attractions and stay hydrated the Icelandic way.

Drinking on a budget

If you like to have a drink or two then visiting a bar can get expensive. Just a few rounds of beer and wine can quickly add up. Therefore a top money saving tip is to make the most of the duty free shop at the airport. Stock up on a few bottles or cases of beer or bring your own bottle of spirit. You can easily buy mixers in Iceland’s grocery stores. If you have a camper van hire you can quickly take the weight off from your duty free shop. You will also be able to keep your beers chilled in the camper fridge. Stocking up on bottles of beer in the official government run alcohol shops is also a little more cost efficient than drinking in bars. Alternatively, you could opt for a dry trip and use your Iceland holiday to kick-start some healthy new habits!

Nature is free!

The driving force behind any trip to Iceland is to see and experience the great outdoors. Nearly all of Iceland’s natural attractions are free to visit and explore. The Golden Circle destinations of the Þingvellir National Park, the Gullfoss Waterfall and the Geysir Geothermal Area are all free. As are innumerable other experiences in this beautiful country, including waterfalls, glaciers, the incredible black sand beach of Reynisfjara and many, many more.

The same can be said for seeing the Northern Lights. No amount of money can guarantee that you will see the amazing dancing lights. So instead of booking onto an Aurora Borealis tour, you can easily use your camper van to go on your own hunt. You can even hire a specially adapted camper van with a sun roof, so that you can lie back and enjoy the show from the comfort of a cosy campervan bed. So many of those bucket list experiences are entirely free!

Water jetting out of a geyser under blue skies. It is free to visit the Geyser National Park, Iceland on a budget.

Hidden costs of travel in Iceland

Nothing beats being prepared, so we recommend that you do a little research and pack smartly. Some of the hidden costs of a trip to Iceland can kick in when you don’t come prepared with the right gear. So do pack water and wind proof gear, as well as warm socks, gloves, hats and layers. Even if you are travelling to Iceland in summer, the weather can be quite changeable. It may take you by surprise. Also, don’t forget your swimsuit for those hot spring dips!

Another money saving trick if you are hiring a campervan is to pack a simple ingredients kit in your luggage. Stocking up on things like spices and seasoning or equipment like a corkscrew can add up. So pack a penknife and some of your favourite ingredients. Also, things like torches, batteries, chargers and toiletries are important to pack and will save you from having to buy them new in Iceland. Just a little bit of organisation can go a long way.

Free attractions and events

Wherever you roam in Iceland keep an eye out for free things to see and do. In the bigger cities of Reykjavik and Akureyri in the north there will be plenty of free things to do. Think flea markets and food fairs, outdoor artworks and churches. Also, look out for free festivals and events, especially in the summer months there will be plenty going on.

If you are spending a few days in Reykjavik is could be worth investing in a Reykjavík City Card. This card entitles you to enter many of the capital’s excellent museums. This includes the National Museum of Iceland, The National Gallery of Iceland and Reykjavík Zoo. Bus travel within the city limits is also included in the price along with discounts in restaurants and attractions. It certainly can save you money depending on the type of traveller you are and what you want to do. Read the small print and decide if it is right for you.

Hot springs on a budget

One of the quintessential experiences on any trip to Iceland is bathing in a thermal hot spring or pool. We have all heard of the famous Blue Lagoon and it is a beauty. However, entrance fees to the Blue Lagoon and other thermal spas might just tip your budget scales. There are loads of wilder and more remote hot springs in Iceland that are completely free to enjoy. They may not have the modern facilities, or any at all in some cases! But this is what makes them all the more interesting. For example go on an adventure and visit the remote and beautiful Krossneslaug in the Westfjords. Or if you are hiking in Iceland’s Southern Highlands, then the Landmannalaugar Hot Pot is a must visit.

Woman floating in a steamy hot spring lake with mountains in the distance. There are many free hot springs  to enjoy in Iceland on a budget.

In the summer months Reykavik’s Nauthólsvík beach and hot pools are free to enter. You will be joining the city locals out enjoying the warmer weather. So you will get a really interesting cultural experience as well as a dip. They also offer BBQ facilities, so you can bring your own food and drink and enjoy a picnic lunch.

Travel hack: Spend longer in Iceland

One possibility if you are footloose and have the luxury of time is to spend longer in Iceland… This might not make sense on the surface and certainly won’t if you have commitments at home that you can’t leave. But if circumstances allow then you could make the most of Iceland’s 90-day working visa allowance. Travellers from the EU are free to work and travel in Iceland for three months before they need to make things more official. So you could pick up some shifts along the way as you travel around the country. Alternatively base yourself somewhere and take day trips or short excursions around your working pattern. Check out our guide on how to find jobs in Iceland.

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