Iceland on a budget – how to lower the Iceland trip cost (+ example prices)

Let’s be honest, Iceland is not cheap. Classified as the most expensive country, it can make an impression that you need have a lot of money before going there. The Iceland prices can really knock you off your feet! Is it possible to lower the Iceland trip cost with such expensive food, transport and accommodation? How can you travel to Iceland on the budget?

Iceland on a budget

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), don’t care about 5-star hotels and you don’t mind to have sometimes a bit lower comfort – you’ll be just fine. If you follow my tips you can take an amazing 7-day road trip in Iceland for a very affordable price!

I’ve already written about transport and car rental in Iceland. 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.

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

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Looking for a tour in Iceland? Check out these best-sellers:

Iceland prices

Unfortunately, the Iceland prices are not the lowest, which might be a problem if you are on the budget. Whereas you might not be able to have a high standard of travelling while in Iceland, the cost of the Iceland trip can be lowered with several changes and substitutions.

Iceland uses the Icelandic Króna, which for the end of 2018 equals 1 ISK= 0.0083 USD

Examples of Iceland prices

Remember that the range of Iceland prices might be different depending on which shop you go to (as in every other country). The cheapest is the Bonus supermarket.

Prices in Iceland:

1l of milk – 154 ISK

bread – 357 ISK

12 eggs – 600 ISK

1 kg tomatoes – 509 ISK

1,5l water – 240 ISK (but remember that you can drik tap water for free!)

0,5l beer in the shop  – 344 ISK

Skyr – 156 ISK

Food in the restaurant –  2000-2500 ISK

0,5l Beer in the pub  – 1100 ISK

7 days Hyundai i10a car rental – £250

Fuel for 1l – 201 ISK

Budget accommodation in Iceland

That’s what makes most of the Iceland trip cost – accommodation prices.

The best way to save up on accommodation in Iceland is to camp, sleep in the shared hostel’s rooms, guest houses or use Airbnb or Couchsurfing. The last one would probably work only in the biggest cities, such as Reykjavik.

#Hostels

As Iceland is sparsely populated and has more nature and lava fields than towns, finding a cheap hostel might be a challenge. However, here are a few suggestions for you:

• In Reykjavik:
  • The Capital-Inn – located a bit further from Reykjavik downtown but only 15 minutes from the beach and very convenient if you travel Iceland by car. It has access to the shared kitchen. Bunk beds start from £19. Check availability here.
  • Bus Hostel – Located close to the Reykjavik domestic airport and a 20-minute walk to downtown, it offers shared dorm rooms as well as private rooms. Prices start at £29. Check availability here.
• In south-east Iceland – Höfn:
  • Höfn Hostel – environmentally friendly place, overlooking Höfn harbour, with views towards the Vatnajökull Glacier. Prices start at £30. Check availability here.
• In north Iceland – Akureyri:
  • Akureyri Backpackers – great location, friendly staff, and good facilities. Prices start at £27. Check availability here.

#Camping

You can choose between private campsites or wild camping.

Iceland campsites

In the private campsites, you need to pay. Usually, it’s around 1700-2100 ISK per person. In some of them there are toilets and showers, in others yo, 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.

*Useful tip for accommodation in Reykjavik*

There is plenty to see in Reykjavik, so it’s worth staying there at least for one night.

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 the 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.

Wild camping in Iceland

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 an amazing place for the best views from your tent.

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

Is it possible to wild camp 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 kilometres, 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 number of tourists coming recently to Iceland and some bad experiences of them not respecting the 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.

Long story short – we were struggling sometimes to find a 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 sometimes, but it was definitely harder than I thought it would be. Maybe if we left the car by the road and then walked more inland, then it would be easier, but we were usually starting to look for space when it was already getting dark (we were busy visiting places during the day!).

Budget “Shower”

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.

Cheap food in Iceland 

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

#Where to eat in Iceland? Not in the restaurants.

Obviously, food in restaurants can be very expensive. Ok, we went to them a 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 lunchtime, so it’s worth checking them. And if you are not sure what to try, check here for the best and worst Icelandic delicacies.

#Become your own chef

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 anytime 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.

#Make “Bonus” your best friend

Shop with a “pig” is the cheapest Icelandic supermarket. Something like British “Asda”, it allows you to find the 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 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!

More Iceland read:

Ultimate South Iceland road trip itinerary

Best free and wild hot springs in Iceland

Iceland food – what to eat and what to avoid

Car rental in Iceland

Must-see places in South Iceland

Iceland off the beaten path 

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