Forget the naysayers – Iceland on a budget is possible! I’ve put together some handy tips to help you save money and make the most of your holiday!

As anyone who loves Scandinavia already knows (and I’m definitely one of these people), it can definitely be a difficult region to explore if you’ve got a tight budget. The higher taxation and cost of living can be a shock for any tourist, traveler or adventurer, but if you keep a few nifty tricks in mind then you’ll definitely be able to manage a trip to Iceland on a budget, saving more than you thought would be possible!

Iceland on a Budget

The best time to go to Iceland | Cheap Accommodation in Iceland

Getting AroundDaily Costs

The Blue Lagoon in Iceland

The best time to go to Iceland

As any seasoned traveller knows, the time of year you travel plays a huge factor in how much you pay for flights and accommodation. For Iceland, the summer months are undoubtedly the peak season. From mid-June to August, tourists flock to Iceland when the weather is warmest and the days longest, so expect the steepest air fares and hotel rates during this period of time.


If you’re looking to really stick to a budget, then I advise going during the low or shoulder seasons, avoiding the height of summer as much as you can. Granted, you’ll have to bring a thicker coat with you, but it’s definitely the best option if you’re want to travel for less! The Northern Lights can be seen from September to mid-April anyway, so you won’t be missing out on much at all. In fact, a lot of off-peak tourists find that it’s a great time to really get to know Reykjavík and enjoy those awesome landscapes in peace.

However, one thing to consider when travelling off-peak is that the majority of tours tend to stop in September. If you’re feeling adventurous enough, you can hire your own car and create your own itinerary instead (more about that in a later paragraph!). So, if there is a specific tour of the Golden Circle you’d like to do for example, consider coming in Spring instead. Also a lot of very rural roads can be subject to closures due to adverse weather conditions, but it’s just a case of informing yourself and asking locals as you plan ahead.

As you can see there are some ups and downs to both options. The summer is warmer and brighter but more expensive, the winters are peaceful and cheaper, but darker and quieter. It’s up to you when you want to fly of course, but for me, the lure of off-peak travel is being able to enjoy those breathtaking landscapes all to yourself and exploring this majestic island in your own time. With a country this stunning, that’s the best way to do it surely!

Northern Lights visible above small cabin in Iceland

Cheap Accommodation in Iceland

The higher taxation in Scandinavia means that hotels tend to be the more expensive option, and the same applies to Iceland too. Unless you really can’t part with particular luxuries such as free toiletries in the bathroom, then I have one recommendation: compare prices or go local! Renting apartments are a fantastic alternative to hotels, and they’re often beautifully designed too thanks to the Scandinavian knack for interior design. The same goes for guesthouses, which are quite common here. This is a fantastic option if you’re staying in Reykjavík for a few days, and you’ll be able to make yourselves right at home as you see the city. Similarly, you can also rent several cabins around the country if you’re looking to do a major roadtrip and delve into the rural regions away from most tourists.

If you can convince some of your pals at home to come with you, then you’ll be able to split the costs of accommodation as well, making things even cheaper for you. Just ask around and you might be surprised by how many will take you up on the offer! And if you’re younger travellers looking to meet a few friends along the way, then why not stay in a hostel? Getting a few beds in a dorm room also works out cheaply and you’ll be able to get to know locals and travellers who can recommend everything from restaurants and bars to places to stop off during a roadtrip.

Again I’ve got some handy links for you below. :)

Aerial view of Reykjavik, the capital city of Iceland

Getting around in Iceland

Iceland only has a small population, and the terrain can border the extreme. As a result, public transport can be a little patchy in terms of coverage, but it’s certainly reliable and good quality. There are no trains for example, and if you want to travel to rural areas away from Reykjavík without driving then it’s highly recommended that you inform yourself of timetables and routes well in advance. Strætó is a very good website for this. There are also several busses that can take you to and from downtown Reykjavík from the airport, so if you’re staying in the city during your time in Iceland then that’s always a good option to take.

If you want to move around Iceland, then the absolute best way to do this is by hiring a car. Prices can be very reasonable (even more so when split between several people), and it’s worth it for the fact that you can discover some incredible landscapes and enjoy complete flexibility. Book in advance and you might also be able to avail of a few discounts too. If you’re travelling during the colder months where weather conditions become more severe, then a 4×4 will be your safest option when dealing with snow and ice. Inform yourself about driving conditions and road closures over at before you go and you’ll be prepared for anything!

Stunning Vatnajokull glacier and mountains in Iceland

Daily costs and expenses

Another thing you’ll have to keep in mind when in Iceland is that food and drink will also be more expensive. Alcohol is one thing that’s best bought in duty-free. Like many other Scandinavian countries, the sale of alcohol in shops is restricted. Supermarkets aren’t permitted to sell any – instead you’ll have to go to state-owned Vínbùðin stores, which sell everything from beer to stronger liquors, if you want to buy it yourself. You also have to be above the age of 20. However if you’re just wanting a glass of wine to go with dinner then most restaurants are licensed to sell alcohol, as are bars and clubs.

Eating out for a meal can be an expensive affair, so if you want to eat on a budget then chances are you won’t be dining at fine establishments every night. You’ll find plenty of fast food places in larger towns and petrol stations (convenient if you’re on the move!) that can fill you up for slightly less – hot dogs are popular in Iceland and are great quick fix if you’re feeling peckish. Otherwise self-catering is the way to go if you want to save your cash, but that’s hardly a bad thing! Food prices in supermarkets are similar to European ones, provided you’re not buying goods that had to be imported.

Another thing to remember is that a lot of natural landmarks and activities (waterfalls, hiking etc.) can be done for free, though for more riskier routes it might be worth finding a guide who knows the lay of the land. Major attractions such as the Blue Lagoon, the National Museum of Iceland and Geysir charge entrance fees, so read up on what you want to see and do before you go.

The Blue Lagoon in Iceland

Iceland may have a reputation for being expensive, but there’s actually a lot you can do to help keep those costs down! Just ask yourselves which sights and experiences you definitely want to do and you’ll be able to create an itinerary that you can stick to and help budget everything on a day-to-day basis.

This really is such a breathtaking and awe-inspiring country, so don’t let those money matters keep putting you off. You’ve just got to go out there and do it! :)


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