Iceland on the budget – where to stay and eat + great cost saving tip if you start in Reykjavik!

Let’s be honest, Iceland is not cheap. Classified as the most expensive country, it can make an impression that you need to rob a bank first to travel there. Is it true?

Iceland on a budget where to stay and eat

There are several ways, that can help you to travel Iceland on a budget. If you like nature (that’s what Iceland is all about anyway), don’t care about 5 star hotels and you don’t mind to have sometimes a bit lower comfort – you’ll be just fine.

I wrote about transport and car rental in Iceland here. Whereas renting the car might not be the cheapest option, it gives you a lot of flexibility, and you can even sleep in the car. When you have limited time, it’s the fastest way to travel.

Other posts about Iceland: places you can’t miss , best natural hot pools and off the beaten path gems.

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That’s what brings the most to the total travel cost in Iceland. The solution is easy – camp.

You can choose between private campsites or wild camping.


In the private campsites you need to pay. Usually it’s around 1700-2100 kronas per person. In some of them there are toilets and showers, in others you would need to pay for it additionally. Sometimes they also have cooking area/kitchen. But the most important part is that you have easy access to flat and dry spot for pitching your tent. It’s “life saving”, especially in difficult weather conditions, when it rains, it’s dark and the only thing that you can see around are the fields with fences or a lava field.


Camping in Skogafoss
Campsite in Skogafoss
Campsite in Geysir area
Campsite in Haukadalur valley next to hot spring area

*Useful tip for accommodation in Reykjavik*

The best place to stay in Reykjavik is the city campsite. It’s a huge camping space with brilliant facilities. Several bathrooms with showers and toilets, big kitchen area with indoor dining space tables and BBQs outside. Moreover, it is located just next door to the geothermally heated swimming pool, where you can relax in hot tubs (check more info here).

One cool place about that place is a “free stuff shelf”. It’s a space, close to the outdoor sitting area, where people leave things that they don’t need anymore. Reykjavik is a main hub for arrivals and departures from the country, therefore the amount of people passing by that place is huge. And so is the number of things that they leave behind. We were on the campsite during our first night in Iceland and thanks to that we managed to get most of the needed things there. Many food items, camping gas bottles, toiletries (also toilet paper!), even sleeping mats and pillows. I’ve seen some girls getting the full tent from there. It’s amazing – nothing is wasted, because instead of throwing things away other people can re-use them. Just remember to return back there before departing from the country, so you can leave all the things that you don’t need anymore and help others.

Northern lights in Reykjavik campsite
Northern lights in Reykjavik city campsite

Wild camping

Before coming to Iceland I have planned to wild camp there most of the time. I do it quite often when I travel, especially in Scotland – it’s legal, free and beautiful, because you can choose amazing place for the best views from your tent.

However, things didn’t seem to be so easy with wild camping in the south Iceland (I don’t know about the north, as we didn’t get there).

camping iceland
Camping in Iceland

Wild camping in Iceland is legal on the public land, or on the private one only if the owner agrees. You might think, that with such a small population of the country and a huge uninhabited area this would provide many free places for free camping. Not entirely. Here is why:

  • Many places in Iceland are covered/made from volcanic rocks. Pitching the tent on the top of the rough lava field is not the most comfortable thing and when you can see those fields stretching for kilometers, the faith of finding the cosy spot quickly fades away.
  • A big part of the Icelandic land is actually in the hands of private owners – you will see big parts of the area fenced off with “private” or “no access” signs. It’s crazy to think, that someone actually owns that amazing waterfall or has a hot spring behind the house, but that’s exactly how it is.
  • Because of the amount of tourists coming recently to Iceland and some bad experiences of them not respecting privacy of the local people, now in many places you can see “no camping” signs. I’ve heard stories of tourists camping in private lands and leaving trash and excrement behind. All the perfect camping spots near the popular tourist attractions have now also “no camping” signs.
wild camping in Iceland
Our wild camping spot in Iceland

Iceland and lava field

no camping sign in Iceland
Sign for no camping in Iceland

Long story short – we were struggling sometimes to find good spot for wild camping. It was also a problem of having a car – we needed a place to leave it for the night and it was harder to be hidden with a tent somewhere if the car is parked nearby. We managed to wild camp some times, but it was definitely harder than I thought it would be. Maybe if we left the car by the road and then walked more in land, then it would be easier, but we were usually starting to look for a space when it was already getting dark (we were busy visiting places during the day!).

*Tip about showers* – instead of waiting in the queues for the one on the campsite and paying for it, take advantage of the free natural hot springs (I wrote about the best ones here), where you can take a hot bath and sometimes also a shower, or go to swimming pools located in every town – they have cheap entrance and also hot tubs and showers.


Apart from camping, there are of course other options available in Iceland. If you feel like sleeping in the normal bed and not your the camping mat, you can choose from several guest houses, hotels, hostels or airbnb accommodation (click here to get £30 travel credit from me for you ♥). We stayed one night in this guesthouse, close to Hofn. It was very nice and clean place, cosy bed, spacious kitchen and located far enough from light pollution, that we managed to see the Northern lights blinking through the window!


Everyone needs to eat, so food is another important cost to bear in mind when you are trying to travel cheap in Iceland. How to spend less on food in the island?

Skogafoss Iceland
Lunch in front of Skogafoss
  • Don’t go to restaurants

Obviously, food in restaurants can be very expensive. Ok, we went to them few times, and it was still fine, as we wanted to get to know local cuisine (and if you look at Aberdonian prices the difference is actually not THAT huge). You can do it once or twice if your budget allows you to – otherwise better stay away from them. You can still find some local food in the supermarkets and visit some small cafes, where you can try local products for much cheaper. Some of the places also have meal deals during the lunch time, so it’s worth checking them. And if you are not sure what to try, check here for the best and worst Icelandic delicacies.

  • Cook yourself

If you are on a road trip and you are planning to camp, the camping stove is the best solution. You can buy gas in Reykjavik or take one for free from the campsite, as mentioned above. Buy some local products in the shop and cook on the way. It allows you to have nice, warm meal any time you want in any place you fancy – best views guaranteed. And for a fraction of the price.

If you stay in hostels/guest houses you will most probably also find the kitchen available to use by guests.

  • Go to “Bonus”

Shop with a “pig” is the cheapest Icelandic supermarket. Something like British “Asda”, it allows you to find equivalent of other brands but for much cheaper. They are not that bad (depends what you choose), and you can combine some meals from them.

  • Bring some food with you

Iceland as a quite remote island, doesn’t really have easy access to all the items, that we have in Europe. Most of them are now imported in the country, but this means much higher prices and not the best taste (especially when it comes to the vegetables). It might be worth then to bring some of your favourite food with you. Vegetables, dry food for cooking and alcohol (if you drink) are some of the items, that you might find handy to import in the country. There are some restrictions if you are planning to bring big amounts, but if it’s just for your own use then it’s perfectly fine.

  • Limit alcohol

Similarly to other Nordic countries, prices of alcohol in Iceland are very high. Beer costs more than the campsite, not mentioning any other alcohol. If you want to try some local spirits – buy them in the special shop or on the duty free when you are entering/exiting the country. It’s worth to bring some alcohol with you, especially if you want to enjoy a glass of wine during the swim in the hot spring (the best idea ever!).

  • Enjoy free coffee

Free coffee is a common trend in Icelandic offices – banks, post offices, shops, travel agencies. You will find a coffee machine with free coffee for everyone. It’s usually good quality and it will nicely warm you up during the cold day.

I hope that advice will help you to travel cheaper in Iceland and make your perfect holidays come true.

Do you know any other cost saving tips for traveling in Iceland? Would you use the ones that I mentioned? Let me know in the comments!

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Iceland on a budget where to stay and eat

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9 thoughts on “Iceland on the budget – where to stay and eat + great cost saving tip if you start in Reykjavik!

  1. Iceland has been on my bucket list for a long time and this is SO helpful Aga. Seriously. Saving this for later so I can refer to it when I’m planning my trip. And your photos of the stars are just gorgeous! 🙂

    1. Thank you, Maya! It’s very good to hear that this might be helpful for you! I hope you’ll manage to go to Iceland soon, as it’s really stunning location 🙂

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