13 Ways To Save Money While Traveling Iceland (2018 Edition)

Iceland: the land of sheep, northern lights, volcanoes with unpronounceable names (try Eyjafjallajökull), and crazy high prices. It’s supposedly one of the least budget-friendly countries in the world — which made visiting even more appealing to me. I always view expensive countries as a challenge. Figuring out how to visit an expensive country on the cheap is like solving a puzzle to me and I relished the challenge of finding out if visiting Iceland on a budget was possible.

At $54 USD a day, I don’t feel like I missed out on anything. Sure, I wasn’t eating fancy meals at restaurants (though I did eat out a couple of times) and I certainly couldn’t pay for activities such as whale watching, guided glacier walks, or helicopter rides. And, while those would have been fun to do, I found enough free activities to fill my time.

Suggest Budgets for Iceland

How much does it cost to travel Iceland? Well, not as much as you think as you can see. On the low end, you could get by on 6,500–8,000 ISK ($60–$75 USD) a day. That budget includes using local transportation, staying in an Airbnb, a hostel, with Couchsurfers, or camping; taking limited tours; cooking most of your food (restaurant meals are really expensive); and limiting your drinking.

There are many things in Iceland that will eat into your budget and, in the land of $2.50 USD bottles of water, it’s easy to unconsciously spend money. A beer here, water there, a snack there can add up quickly, and suddenly you’ll find you spent an unplanned $100 USD. You have to work to save money here and be conscious of where your money is going. Keep track of every penny! On my first trip, I got tea just about every day (I love tea) but, at $3.50 USD a pop, it was starting to add up so I had to stop.

Hitchhike — Iceland is one of the easiest and safest countries in the world for hitchhikers. You can find rides throughout the country. It’s especially easy in the southern part of Iceland. Though harder, it’s also not impossible to find a ride in the off-season or in the sparsely populated north. I hitchhiked in the Westfjords and it often took me an hour or more to find a ride. However, in the south, you’ll rarely wait more than 15-20 minutes.

Camp — Camping is available everywhere in Iceland. You can camp in designated campgrounds for about $14 USD per night and some hostels allow you to put up tents too. Camping is significantly cheaper than hostels (see the next couple of tips). You’ll need to have your own gear and sleeping bag. Moreover, if you really want to save money on accommodation in Iceland, you can also wild camp and not pay any fees (i.e., just sleep anywhere you want!). It’s legal as long as there’s no sign posted to the contrary, it’s not private land (though some farmers might give you permission), and it’s not in a protected wildlife area. I met a Spanish guy who did this for most of his trip.

Become a Hosteling International member — Most hostels in Iceland (especially outside Reykjavik) are part of the Hosteling International group, which means they give discounted rates to members. Hostel dorms cost $27-33 USD per night, and HI members get $5 USD off, so if you plan on staying in hostels, the $28 USD annual membership will pay for itself in no time. You can get a membership at any hostel or online before you go.

Bring your own sheets or sleeping bag — As with other Scandinavian countries (yes, I’m putting Iceland in that category), many hostels in Iceland charge you a fee for bed sheets if you don’t have your own or a sleeping bag (pillows are free!). Linen fees begin at $10 USD; however, be sure to research your hostel thoroughly as some will not allow you to bring your own sheets/sleeping bag. Note: If you plan on staying in the same hostel for a few days, you’re only charged the linen fee once.

Don’t drink and your budget will be fine! OK, maybe once in Reykjavik since its nightlife is world famous. But other than that, don’t. You’ll save a bundle and feel a lot better. No one wants to hike a volcano with a hangover. Most Icelanders don’t go out until past midnight because they want to get sauced at home on the cheap first. (All my Icelandic friends place duty-free orders with me when I come visit.)

Eat the hotdogs — If you are going to eat out, eat at the sandwich and hot dog stalls you find through the cities. They offer the cheapest (but not healthiest) food in the country. A hot dog costs about $3.50 USD and a regular sandwich will run you about $13 USD (about $17 USD with a drink). A small sandwich is about $8.50 USD. Icelanders have an odd obsession with hot dogs, so as long as the city has more than one road, you’ll find a hot dog stall around.

Get a bus pass — During the summer months, you can purchase a countrywide bus pass for $323 USD. If you don’t want to hitchhike, this will be your next cheapest option for getting around Iceland on a budget, especially if you are traveling for a couple of weeks or more. During the winter months, many of the bus routes are closed and this pass isn’t offered. When that happens, you can use the website listed below to find cheaper rides or pay as you go.

Rent a car — If you are coming in the off months, staying for a week or less, or don’t want to hitchhike, I would rent a car. They cost between $40-70 USD per day but you can split the costs with traveling companions (or by picking up travelers on the road!) and you’ll get a lot more flexibility than if you take the bus. The best of Iceland isn’t found along its main highway! SADcars offers the cheapest car rentals in the country.

If you rent a car, pick up hitchhikers along the way. They can help pay for gas and lower your expenses. Moreover, you can use the website Samferda to find passengers. This website is very popular and you’ll find a lot of listings on it, especially between some of the big cities. ( Note: You can also use this website to find rides. Even if you have to pay the driver, prices are about 50% of the cost of the bus.)

Couchsurf — Iceland has a very active Couchsurfing community. I stayed with hosts in Reykjavik and Akureyri and had someone else take me around the famous Golden Circle (the ring of attractions near Reykjavik). Getting involved with the community here is a sure-fire way to save money, get local insights, meet wonderful people, and get a free place to stay. I met a lot of people through the website who took me in and showed me places I wouldn’t have found on my own. Even if you don’t use the website for accommodation, use the community aspect of it and meet some locals. Icelanders are a welcoming people.

Find Free Hot Springs – While the Blue Lagoon may be the most popular hot spring, there are lots of others around the country that are free (or at the very least, less money than the Blue Lagoon). Visit the website Hotpot Iceland (hotpoticeland.com) to find the best hot springs all around the island! Some noteworthy hot springs are Reykjadalur, Seljavallalaug, and the underrated Djúpavogskörin.

Iceland doesn’t have to be expensive to visit. It is possible to travel around Iceland on a budget. These 13 tips will help you save money in Iceland and turn it into a budget-friendly destination. I never felt like I wanted for anything in my two weeks there. (OK, I wanted for some food with flavor, but I can get that back home.) But, overall, while Iceland is never going to be “dirt cheap,” it doesn’t need to be an impossible budget destination. You can travel Iceland comfortably without spending your life savings. Just follow the tips above and have an amazing adventure! GET ALL OF MY ICELAND BUDGET TIPS AND ADVICE!

I took advantage of the Icelandic stop over. I had 4 days on my own without kids or husband. I made arrangement to rent a room in someone’s home via AirBnB. It was a large room with access to a kitchen and bathroom. At that time it was less then 50 dollar per night. I took buses around and booked my self on several tours. The Golden Triangle was worth it… Plus it included scuba diving in the Silfra Crack… The next tour I did was horse riding and whale watching.

The fist day I hooked with a couple of young gals sharing the room next to mine and we went to a fleamarket. There I got some good deal on Iceland Wool Sweaters. The later went to a reasonably priced place for the best fish and chips I have ever had …ever. One one of the days I took a ferry over to Viday Island. It it pretty but do not eat at the inn near the ferry dock. It ended up being 27 dollars for a ham sandwich with fries and a cup of tea… But I have to say the it was lovely but it would have been better to skip the food and just walk around. One afternoon I found a place in the middle of Rekjyvick that had the best lobster bisque. It was not dirt cheap but you get a huge bowl for around 12 dollar and it comes with bread… you with people you don’t know on these long benches. So that was fun… for the rest of my meals I had picked up food from the grocery store like cereals and Iceland skyr.. and some juices.

Plus the host suggested skipping the Blue Lagoon thermal baths. It is very expense and very touristy. Besides it is not even natural. In stead I went swimming at the local aquatics center.. It has 2 huge swimming pool and there are many thermal heated hot tubs with various degrees of hotness. I was there in the summer and the sun stays up all night long. It felt strange..