Iceland is one of the most expensive countries in the world to live in. But it is possible to visit on a budget.
If you plan on travelling to Iceland on a budget, you won’t be living lavishly, eating at restaurants, and you’ll probably have to slow down on your evening beers.
But that’s okay. Visiting Iceland is about seeing the sights. And this is definitely possible on a small budget. Here’s how to do it.
We always recommend Couchsurfing as the best option for accommodations when travelling on a budget. But Iceland is a country with a small population, making the capital city centre of Reyjkavik even smaller. This doesn’t leave you with a lot of options (it left us with none).
Hostels are a popular choice when budget travelling and for most, this is usually a first option. But with hostel prices being so high in Reyjkavik (starting at around 3000 ISK*) you can easily find a private room on AirBnb for the same price or even cheaper.
If you’re travelling with more people then you can split the cost of a room and save some more krónas.
Don’t even consider hotels.
Best bet: AirBnb.
Avoid restaurants and bars. Enjoying a prepared meal at an inexpensive restaurant will cost you at least 2000 ISK. And a pint will cost you around 1050 ISK. If you want to save money, head to a local grocery store instead and stock up on cheap staples.
This also means skipping the chance to impress someone in the kitchen.We stuck to college living with oatmeal for breakfast, tuna sandwiches for lunch, and spaghetti for dinner.
We added survival snacks like granola bars and bananas and that all added up to 1700 ISK for 3 days while staying in Reykjavik.
There’s no need to buy bottled water. The tap water in Iceland is all natural and is better tasting than most bottled water.
Best bet: Budget grocery store like Bónus.
Transportation & Sightseeing
While public transit is still quite steep at 420 ISK, it is still the cheapest option when getting around Reyjkavik.
As for seeing the beauty of Iceland, renting a car may be your cheapest option.
There are bus tours that you can get all around Iceland. But these come at a hefty cost, and they run on tight schedules.
We have many friends who have hitchhiked around Iceland while camping but Icelandic weather can obviously get pretty uncomfortable. For less extreme travellers, we recommend a rental car.
You can get a cheap rental car for two days (we used SADCars and loved it) for the price of a tour around the golden circle. If you are staying in Iceland for a longer period of time, be sure to check for weekly rates as they are usually cheaper.
Don’t be afraid of the roads. The famous sights (Golden Circle and the south side) don’t use gravel roads to get to and driving in Iceland is pretty straight forward. Bonus points for no traffic!
If you can split the cost of a rental car, this will help you a lot. We used Couchsurfing to find like-minded travellers to join us.
Best bet: Budget rental company
Don’t let the high prices of Iceland deter you from visiting. It is possible to visit the country on a very tight budget, as long as you plan and exchange some luxuries for the country’s natural beauty.