Iceland is frequently listed as one of the top 5 most expensive countries in the world. As a relatively remote island nation, everything from gas to food seems to be more expensive.
But Iceland is also an adventurer’s dream! It has some of the most gorgeous, otherworldly scenery, waterfalls around every corner, dreamy hot springs to soak in, rainbows spanning the sky, and a whole host of adventurous activities and experiences to have. So what is a budget-conscious, adventure-seeking traveler to do?
Thankfully, there are many ways to visit Iceland on a budget and still have an epic trip.
In this guide, we’ll discuss a few strategies to get to Iceland on a budget and then how to keep costs low while traveling.
How To Get to Iceland on a Budget
Thanks to budget carriers like Play Airlines and seasonal sales from Icelandair, flying to Reykjavík has never been more affordable. From major U.S. cities, round-trip fares can dip below $400 during off-peak months, and flights from European hubs often hover around $100–$200. Use tools like Google Flights alerts, Hopper, or Going.com (formerly Scott’s Cheap Flights) to catch price drops.
💡 Insider Tip: Booking during the shoulder season (May or September) can offer cheaper airfare and a less crowded experience once you arrive.
Cost of Goods in Iceland
Okay, so you’ve arrived in Iceland on a relatively inexpensive international flight. Cost-wise, that was the easy part! Traveling around Iceland on a budget can be tricky, as lodging, gas, taxis or buses, and food are known to be extremely expensive.
For reference, here are some typical costs you might see in Iceland:
- Cost of a taxi from Keflavik International Airport to Reykjavik city center (about a 45-minute drive): $200
- Cost of the bus fare between Keflavik airport and the city: $30
- Cost of gas: $8-9 per gallon
- Cost of burger: $20
- One bowl of lamb stew: $22
- Basic hotel: $150-200 (but varies depending on the area. The choices are smaller and costs higher outside of Reykjavik)
There is good news, though! The cost of groceries is much more reasonable than the cost of restaurants, and almost all of the sites in Iceland (waterfalls, beaches, hikes, geysers, hot springs) are free to visit.
Lodging in Iceland on a Budget
Hotels in Reykjavík can still set you back $150–$200 per night, but there are more affordable alternatives:
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Hostels and Guesthouses: Places like Kex Hostel and Reykjavík Downtown HI Hostel offer dorm beds for under $50/night.
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Farm stays & guesthouses: Spread across the countryside, many offer cozy rooms with local charm.
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Camping: Iceland has an excellent network of campsites open from late spring to early fall. A Camping Card (approx. $180) gives access to over 40 sites across the island.
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Campervanning: A budget-friendly favorite, campervans eliminate the need for hotel rooms and car rentals and come equipped with a stove and cooler for easy meal prep.
While you can take an Iceland road trip staying in more budget-friendly guest houses, the nature of a trip to Iceland (insanely cool attractions spread out around the country), combined with the fact that lodging and restaurants do get more expensive outside of Reykjavik, mean that the best way to do Iceland on a budget is to travel around Iceland by campervan.
If you’ve never considered a campervan trip, don’t scoff! Initially, I was hesitant and not interested in traveling by campervan, but the week we spent campervanning around Iceland was one of my absolute favorite travel experiences ever.
Here’s why traveling by campervan is both epic and a great way to see Iceland on a budget.
While the cost of a campervan varies depending on the size of the van you get, the extra amenities you might add, and the company you go with, you can rent a campervan for around $700 a week.
This covers the cost of lodging and transportation and also helps subsidize your food costs! The campervan provides you with a refrigerated cooler and a burner stove so that you can store groceries and prepare simple meals. This helps immensely with keeping your food costs low and also helps you spend more time doing what you came to Iceland to do—exploring the country!
It helps that Iceland is well set up for campervanning. As a popular mode of travel in Iceland, campervanning has many great campsites available around the country, and it’s not difficult to find public bathrooms and showers.
The showers and bathrooms were, without exception, incredibly clean and nice—and this is coming from someone who absolutely hates public showers, so that’s saying a lot.
Saving Money on Food
With food in Iceland being so expensive and traveling by campervan (with a burner stove and electric cooler provided), I highly recommend buying groceries and making your own meals.
Typical grocery stores in Iceland include Netto, Bonus, and Kronan. Bonus is the cheapest, but Netto has the best pastries (more on that below!)
We grabbed breakfast bars and yogurt for breakfast, crusty bread, smoked deli meats (try the smoked lamb for a different experience!), yogurt, protein bars, and/or fruit for lunch.
For dinner, we took a slightly different tack. We usually made up a dehydrated meal pouch we brought with us from the United States. This was a brilliant move! The weather in Iceland, even in summer, can be chilly and volatile, and there were so many things we wanted to see that it was hard to stop.
Thus, we were hungry, tired, and often facing windy or rainy weather when it was time to eat, which did not motivate us to want to set up a whole cooking situation and spend 45 minutes prepping a hot meal. With the pouches, we just heated water, poured it in, and 5 minutes later had a tasty and hot dinner. We supplemented with more of the same from lunch – bread, fruit, etc. This is an economical and easy way to get some good meals in Iceland.
Of course, you can’t travel to a new country and not sample some unique cuisines! Here are some things you absolutely must try in Iceland when on a budget:
Hot dogs: Icelandic hot dogs are a beloved national food. They are unique in that they are made from lamb meat and have unique toppings of fresh and crispy onions, mustard, and remoulade. You can find them in any gas station, but the best and most famous spot is Bæjarins Beztu Pylsur in Reykjavik. These are a very budget-friendly option, as one hot dog costs around $4.
Lamb stew: You will see sheep and lambs everywhere in Iceland, grazing along (what felt like) almost every road we drove on. Icelandic lamb stew is pretty brothy, has other vegetables like carrots and onions, and is delicious.
Skyr Yogurt: Icelandic yogurt. It’s the only kind of yogurt in Iceland and is of a thicker variety.
Chocolate licorice: Icelanders love licorice in their chocolate, and the Sirius brand easily has the best chocolate licorice bar (and I’m not a licorice girl at all). These chocolate bars are standard at grocery stores.
Fermented Shark (Hakarl): This old-school traditional Icelandic food is definitely a unique experience. If you go into Cafe Loki in Reykjavik, you can ask for a serving of hakarl, which is just four small bite-sized pieces of shark, plenty for two people to share. This will set you back about $7 and is probably the most economical way to try this dish.
Serbokud Vinarbraud Pastry: Iceland has impressive pastry options, and the grocery store, Netto, had a lot of high-quality pastries, including serbokud vinarbraud, a flaky pastry with a custardy middle.
Activities in Iceland on a Budget
Thankfully, most of the things you can see and do in Iceland are free, which is great for traveling on a budget.
- Most of the Iceland hot pots are free. You do need to pay for the more spa-like ones, but the natural ones are either free or request a small cover charge from the landowners for upkeep (e.g., $5).
- The waterfalls are all free to visit – and there are so many good ones in Iceland! Be sure to check out Gullfoss Waterfall on the Golden Circle.
- Geysir is free to visit, where you can watch geysers erupt or hot pots bubbling
- The black sand beaches e.g., Reynisfjara, Vik, are free
- Hikes (e.g., Studlagil Canyon, Múlagljúfur Canyon, Vik airplane, etc.) are free
- Epic viewpoints, like Glacier Lagoon, Diamond Beach, Thingvellir National Park, the Hvitserkur dragon rock, or the Snæfellsjökull volcano, are all free.
If you want to skip the Blue Lagoon, Try Local Pools. Local geothermal pools (like those in Hveragerði or Hofsós) offer a more authentic, less expensive soak—often under $10.
Big-Ticket Items Worth Spending Money on in Iceland
We’re always trying to travel on a budget, but that doesn’t mean we won’t spend some money on seriously extraordinary experiences. In Iceland, we were delighted to save money on our flights, food, and lodging and spend a little more on epic activities. Here are some experiences worth your consideration in Iceland:
A Glacier Hike
Glaciers cover 11% of Iceland, and you can climb them! Because hiking a glacier can be dangerous (there are crevices and holes you could fall into), you must hike the glaciers on a tour with a guide.
The best glacier hike you can do is on the Falljokul glacier with Melrakki Expeditions. Choose the 5-hour tour—it’s so worth it to get up close to the ice cliffs and see the struggles and ridges in the ice.
The Blue Lagoon
This Insta-famous hot spring spa is right by Reykjavik, known for its steaming, milky blue waters. While this is a well-known attraction, it lives up to the hype. The water is warm and relaxing, plus you get a drink from the swim-up bar and a mud mask, and the use of the saunas is included in the basic ticket price.
Geosea Spa
This hot spring spa is on the north coast of Iceland, just outside of Husavik. It’s an infinity pool hot spring, with the spa overlooking the bay of Husavik. The water is nice and steaming; honestly, the views can’t be beaten.
Rafting or Kayaking Tour on the Glacier Lagoon
Go out on a speedboat or kayak on the Glacier Lagoon, weaving in and out between the icebergs floating in the water and getting up close and personal with the ice. You might even see seals popping up!
Whale Watching Tour
Iceland is one of the best spots for whale watching, and the city of Husavik is known for having the best whale watching in Europe. Some popular whale-watching spots include Husavik, Ayukeri, Reykjavik, and the Snæfellsnes peninsula. I recommend going with North Sailing company – their tours are phenomenal.
Getting Around for Less
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Car Rentals: Opt for smaller, fuel-efficient vehicles, and always compare prices with companies like Northbound.is or SADcars.
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Campervans: As mentioned above, they combine lodging, transport, and cooking into one.
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Public Transport: Limited outside Reykjavík but valuable for day trips if you don’t want to drive.
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Fuel Prices: At around $8–$9 per gallon, plan ahead. Use apps like Gasvaktin to find the cheapest stations.
Final Thoughts
You don’t need a luxury budget for a once-in-a-lifetime trip to Iceland. With a bit of planning and a flexible approach, you can soak in steamy springs, hike volcanic trails, and marvel at the aurora—all without going broke.
During our budget trip to Iceland following this strategy, we spent ~$2000 for two people on our 7-day itinerary, which included four of the more expensive experiences above. Without the splurge on activities, our costs would have been much lower, but it still would have been a fantastic trip.
In Iceland, the magic is free—if you know where to look.
