Visiting Iceland on a Budget: Tips to Make Your Trip Affordable in 2025

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Iceland is one of the most unique places to visit in Europe, but it comes with a large price tag. Here are my strategies to save while you explore!

Iceland was the first country I visited in Europe (if you don’t count Turkey). While I had an unforgettable time exploring the country in my early 20’s, I remember being stunned by the prices. Honestly, it’s still one of the most expensive places I’ve ever been. 

It’s also the kind of place that continues to call me back. My most recent visit in 2025 was actually my third trip to Iceland, and my partner has been several times without me. The landscapes are truly otherworldly, the country feels delightfully safe and secure, and the locals are friendly. 

Despite the expense, I’d never write this post if I didn’t think it was worth it AND possible to visit on a budget. The key, more than other travel destinations, is to have a plan and stick to it. Spontaneity in Iceland is probably going to cost you, especially if it’s related to where you eat, stay, or paid activities. 

Here are my tips and tricks to save on your trip to Iceland, from the little tweaks to the big compromises. I’ll tell you where I splurged and where I skimped so that you can make the best decisions for your trip. 

Is Iceland Really Expensive?

I would consider Iceland to be rather expensive when compared to the United States. Prices in Iceland are comparable to those in Norway or Sweden, if not a little higher. In particular, the local food in Iceland is rather highly priced, so budget travelers are usually better off eating mostly at the grocery store. 

A hot dog from a street cart in Reykjavik starts around 820 Icelandic Króna, which is $6.75 (€5.75) and an entrée like fish and chips from Public House in Reykjavik runs about 3200 Icelandic Króna or $26 (€22). A latte from Reykjavik Roasters, my favorite coffee shop in the city, is 880 Icelandic Króna or $7 (€6).

Accommodations are another significant expense for those traveling to Iceland. A hostel bed can easily run $75 (€65) for a night. That’s not a private room, that’s just a bed – usually in a 10-16-person room. 

Hotels, as you might expect, are more expensive. A room in a very budget-friendly hotel runs about $200 (€175), with nicer rooms starting around $260 (€225) per night. 

Tours and activities are no bargain either, at least not if you opt for the paid versions. The Blue Lagoon, one of the country’s most famous spas and attractions, starts at $ 110 (€94) for the most basic package. The luxury package, which includes a private changing room and spa access for 5 hours for up to two people, starts at $840 (€720).

So, in my book anyway, this qualifies as an expensive travel destination!

Is It Worth Visiting Iceland on a Budget?

Whether Iceland is “worth” visiting on a budget is going to be a completely personal call. Here’s how I would think about it: first, am I willing to make compromises? Second, will I be happy navigating the country on my own or sticking to limited guided tours? Finally, am I OK with knowing there are more luxurious options I’m not choosing during my trip?

I pose these questions because FOMO is the easiest way to ruin a budget trip, either because you start splurging and blow your budget or you feel like your trip is constantly coming up short. 

For my part, I have only visited Iceland on a budget – and, to me, it’s completely worth the extra work. I bring some of my own food, cook or prepare nearly every meal, and tent camp during the warmer months. 

How to Save Money on Flights to Iceland

While you can occasionally find deals, there really are not many “cheap” flights to the middle of the Atlantic Ocean. Accordingly, you’ll want to have a plan to save on your flights – one of your biggest travel expenses. Here are a few strategies you can use to save on your Icelandic adventure.  

Visit Iceland as a Stopover 

By far the biggest hack you can take advantage of, in this blogger’s opinion, is visiting Iceland while you’re on your way to somewhere else. Iceland has long promoted tourism through promoting “stopovers” where you can extend your layover by a few nights (typically up to one week). IcelandAir runs flights between Europe and the US with stops at its Keflavik airport. 

With a stopover in Iceland, you can continue on to Dublin, Paris, London, or a number of other cities. 

Be Flexible With Dates and Airlines

Another strategy that you can use on its own or alongside other hacks is maximizing your flexibility when planning your travel dates. By choosing to travel during the shoulder season (March to May; September to November) you can often find cheaper flights. Additionally, there are sometimes budget airlines that pop up for a while before they fizzle out – RIP, Wow Air. 

Use Points and Miles If You Can

I’m a big fan of using credit cards when I travel. First, there’s fraud protection that simply doesn’t exist with most debit cards – this can protect your purchases as well as unauthorized use of your card. Second, you can rack up points or miles, which you can use for travel!

There are some entire blogs out there for using points and miles to the max, and I recommend you check them out when doing your research. My favorite is ThePointsGuy.com. If you’re just opening a credit card for the first time, I’d recommend using ThePointsGuy to choose the best card for you. 

In case you don’t feel like researching further, I use (and love) the Chase Sapphire Preferred card for most purchases. I also have the Amex Platinum card; it’s much more expensive, but it has some great perks like airport lounge access and purchase protection. If you’re just getting started, go with the Chase Sapphire card – I opened mine in grad school and have been using it ever since. 

Look for Budget Airlines and Deals

Finally, you can sometimes find deals by being open to using budget airlines or searching for deals. To find the best prices, I always start with Google Flights and Skyscanner. These two sites will give you a sense of the available routes and options. If you’re searching a few months out or more, set alerts so that you can track the prices over time. Then, go to the airlines directly and check prices. 

Hopefully, they’ll be just as low as what you see on the aggregator sites, but sometimes the price is only offered by an intermediary like GoToGate. I don’t suggest you buy through the intermediary site – I’ve never personally had a bad experience with them, but you have little to no recourse if something goes wrong. Stick to purchasing through the airline directly. 

Getting Around Iceland: Your Cheapest Options

After your transit to Iceland, another major expense will be getting around when you’re here. Like Ireland, Iceland is the kind of destination where you’ll probably want to rent a car. If you can’t rent a car or you’d just rather not, you have some other options – but they may not be as cost effective or convenient as driving yourself. 

Renting a Car on a Budget

You’ll have the most freedom and flexibility if you rent a car in Iceland. Luckily, the car rentals at the airport are convenient and offer lots of choices, from known US brands to local shops. I recommend checking prices on Expedia, Rentalcars.com, and Kayak. Personally, I go for brands that I’ve previously had good experiences with; for me, those are Budget, Sixt, Alamo, and Europcar. 

I always decline the rental insurance coverage and instead use the insurance offered by my Amex Platinum card or my Chase Sapphire Card. 

Camper Vans

Camper vans are a popular way to explore Iceland, offering an enclosed space to sleep after long days of adventuring. The camper vans are also able to drive on terrain that is too rough for standard rental cars, expanding the map of potential places you can visit. 

One of the most popular camper van rental companies is Camp Easy, which has an easy tool to compare prices and features for the dates of your trip. For a weeklong trip (7 days), camper vans start at $80 per day or $550 for the week, with discounts for booking early and longer rentals.. The exact options available for your trip will depend on availability, time of year, and, of course, the type of van that you rent. 

Camp Easy includes basic insurance cover, but you have the option to opt for a more comprehensive policy. The company provides essentials for your trip like pillows, duvets, blankets, stoves, and pots and pans. 

Note: Camper vans must stay in campsites. So, factor in a nightly fee for use of campsites and facilities. 

Tips for Saving on Fuel

Fuel costs in Europe can be staggering for those coming from the US. Honestly, it’s shocking the first time I return to the US and fill a midsize sedan’s tank for $25. In Europe, it’s not uncommon for me to spend $100 on gas to fill the tank of a tiny economy-sized rental car. 

Given the price of fuel, I recommend that you rent the most fuel efficient car possible so that you can save at the pump. You can also save by driving as efficiently as possible, i.e. avoiding sudden accelerations and keeping to moderate speeds. 

Unfortunately, I wouldn’t suggest you rent an electric car unless you have one at home and/or are comfortable navigating the charging and range. Iceland is not very densely populated and can be quite remote, so it’s not the best place to try out new (to you) technology. 

Tours

For those who aren’t opting to rent a car to explore Iceland, guided group tours are a great alternative. These will give you the opportunity to see some of the most popular sites in the country without the stress and expense of rental cars, fuel, insurance, etc. 

Top Day Tour Pick: Golden Circle, Kerid Crater, & Blue Lagoon Tour from Nicetravel

For a day trip where you truly get to do a little bit of everything, this day tour from Nicetravel is the perfect pick. You’ll see the highlights of the Golden Circle, including Thingvellir National Park, Geysir, and Gullfoss waterfall. Then, you’ll make a stop at Kerid Crater before heading to the Blue Lagoon. 

This tour isn’t exactly cheap, starting at $258 (€220) per person, but it includes entry to the Blue Lagoon and is beloved by guests. Be well rested and ready for a full day before you set off!

👉 Click Here to Check Prices and Book Your Tour

Top Extended Tour Pick: 3-Day Golden Circle, South Coast, & Glacier Tour from Nicetravel

If you want to see most of southern Iceland with a fabulous guide and itinerary, this three day tour from Nicetravel might just fit the bill. You’ll see the sights of the Golden Circle, the waterfalls of the southern coast and the infamous black sand beaches, then spend a day seeing glaciers and lagoons before heading back to Reykjavik. This tour includes two nights of accommodations, breakfasts, and all transportation. 

You’ll have the option to add on a guided blue ice hiking tour and/or a boat tour at Jökulsárlón Glacier Lagoon. Note: this tour does not include a stop at the Blue Lagoon.  

👉 Click Here to Check Prices and Book Your Tour

Public Transit

You can easily get around Reykjavik on foot or by public transit, but for most of the places outside of the city that travelers are anxious to see, public transit is sparse or nonexistent. So, if relying on public transit, plan your routes and activities very carefully to avoid being stranded waiting for a bus. 

Travel Tip: You may want to combine using public transit with 1-2 days of guided tours just to ensure you get to see some of the greatest hits. 

Not Recommended: Hitchhiking

When I first visited Iceland in 2015, we opted for the cheapest possible transport: hitchhiking. At the time, it felt relatively safe and there were plenty of Icelanders and Germans who were happy enough to take us from one place to the next. We also got a ride from a car full of men from the US – an imperfect experience that is now one of my all time favorite travel stories.

On subsequent trips, I noticed that the culture around hitchhiking – at least near Reykjavik and the Golden Circle – has changed. I didn’t see anyone trying to hitch a ride on my recent trip, and the amount of tourism has generally increased quite a bit. 

As such, I don’t think the average traveler (myself included) would know how to safely hitchhike in Iceland. Thus, I recommend that you not attempt to hitchhike in Iceland. 

Instead, if you’re willing to take the risk of riding with a stranger, submit your ride request and browse options on Iceland’s carpooling website: Samferda.net. 

Where to Stay in Iceland on a Budget

Accommodations anywhere will eat into your budget, and this is very much the case for travelers in Iceland, too. Here are some of your best options for budget-friendly accommodations on your trip.

Camping in Iceland 

By far one of the biggest ways to save money when visiting Iceland is to camp. Luckily, camping in Iceland is generally very safe, and there are gear rental stores in case you forgot any essentials. 

Campsites

Most people who camp in Iceland utilize one of the many established, fee-based campsites. These tend to have amenities like showers and kitchen spaces, with large sinks for washing dishes and sometimes play areas for children. 

Prices typically vary based on the type of vehicle you’re using to camp, with traditional tent camping being the cheapest. Camper vans, caravans, tent campers, and other similar vehicles will usually pay a higher rate per night. Rates for campsites will tend to be cheaper the further you drive from Reykjavik. 

Wild Camping

If you have the gear and are planning to stay for at least a few nights, the cheapest accommodation option in Iceland is wild camping (essentially dispersed camping, for those from the US). I’ve wild camped on two of my three trips to Iceland and felt perfectly safe each time, mostly because we traveled to spots that were rather isolated. As a bonus, the spots were simply stunning!

We brought most of our own gear on our recent trip, but if you need to rent anything I recommend Iceland Camping Equipment Rental. When we asked, the man working even gave us the leftover stove fuel another traveler had left behind (saving us probably $20!). Be aware that camping gear rentals can quickly add up, so if you’re only visiting for a night or two you’ll probably come out ahead by staying in a hostel or budget hotel room.  

The Icelandic climate can be severe, with cold temperatures and high winds even in the summer. If you’ve never wild camped before, this probably isn’t the best place to try it out unless you have an experienced person in your group. 

Note: wild camping is only legal in some areas for those pitching a traditional tent. Camping in a vehicle is not allowed outside of established campsites. Here are more detailed rules for wild camping in Iceland. 

Affordable Accommodation Options

If camping is not your jam, you’re in luck – there are hotels and accommodations around the island. To get a sense of prices, I recommend going to Booking.com, where they have lots of sort and filter options. Typically, hostels, guesthouses, and private rooms will boast the lowest prices. 

Although a hostel is likely never going to be as nice as a hotel room, I’ve found that the quality of accommodations in Nordic countries (including Iceland) is relatively high. So, while there probably won’t be a room for a rock bottom price, it will typically be clean, well-maintained, and run by English-speaking staff. Of course, this generalization is no replacement for reading reviews – there are duds and scams everywhere!

Eating in Iceland on a Budget

I could write an entire post about eating in Iceland on a budget because a) it’s not the easiest thing to do, and b) it’s one of the biggest ways to save money on your trip. 

Limit Dining Out

Some travel destinations are truly for the foodies, and you’ll really be missing out by skipping the local cuisine. I’d never tell you that restaurant food in France or Spain or Italy is skippable, even if you’re on a budget – you should try a variety of local foods in these countries! In Iceland, however, the cuisine has not quite translated into a restaurant culture in the same way. 

So, you can save some serious money by trying most local foods from the grocery stores instead of buying restaurant entrees. When eating out, I recommend sticking to coffee shops, bakeries, and snack bars if you’re looking to save during your trip. 

Hit Up the Grocery Stores

For any local foods you’re dying to try, consider grabbing a version at a grocery store. From local cheeses to dried fish to chocolate bars, the shops are well stocked and more affordable than a restaurant. My favorite snacks are the Nóa Kropp, essentially a chocolate-coated version of Kix cereal that comes in a red and orange bag. I ate a whole bag on my last trip!

Best Budget-Friendly Meals & Snacks

Here are a few of my top snacks and meals, incorporating local finds from Reykjavik and staples you can find in any grocery store. I also included a few items I’d recommend bringing from home, which can help with cost savings. 

As a lover of spicy food, I always travel with some “pocket peppers” or chili flakes that I can add to any meal – my favorites are from Flatiron Pepper Company. Specifically, I like the Four Pepper Blend (🔥🔥🔥) and the Hatch Valley Green (🔥🔥).

Yogurt and Skyr

We saved money each day of our trip by having the same breakfast every day: Icelandic skyr and granola. I picked up a bag of granola from Reykjavik Roasters and had it for breakfast every day. I actually loved this granola so much that I bought a second bag to take to the US with me!

Simple Sandwiches

Reykjavik has some fabulous bakeries, which can be the perfect place to pick up some sandwich bread before you head out for your adventures. My favorite is Brauð & Co, just a few steps from Reykjavik Roasters. I went for their plain white loaf, sliced, which was perfect for our trip and lasted several days. 

For my part, I opted for my current favorite vegetarian travel sandwich: gouda, pickles, mustard, and potato chips. It’s certainly not gourmet, but it keeps well and is filling after a long day of hiking. Of course, you can add deli meat for a more normal sando. 

An easy alternative is the back-to-basics peanut butter and jelly sandwich As a bonus, PB&J’s don’t need to be refrigerated! Mix it up by swapping peanut butter for almond butter or hazelnut butter if you’re sick of the classic. 

Backpacker Meals

A lightweight and reliable meal you can enjoy while camping is a backpacking meal – you’ll just need to add hot water to cook them. My favorite backpacking meal is the Pad Thai from Backpacker’s Pantry. I bring them with me in my luggage, but there also versions you can buy from gear stores in Iceland. 

A fair warning with these: you probably won’t want to eat freeze-dried meals if you have something else easily available. Save these for when you’re out in the wild camping!

Instant Coffee

For the coffee lovers: I started traveling with instant coffee a few years ago, at the suggestion of my father, and I haven’t looked back. Not only can I consistently have great coffee while I’m on the road, but often for much lower prices than at a roadside cafe. The packets weigh almost nothing, they fit in a pocket, and all you need to add is water (plus milk and sugar, if that’s your thing!). 

Within the US, my favorite instant coffee is from Ozo Coffee in Boulder. You can check prices and order here. In Europe, I love, love, love the instant coffee from The Barn, a roaster in Germany. Otherwise, you can check your local cafes to see if they sell their own version of instant coffee.

Free and Cheap Things to Do in Iceland

Luckily for budget travelers, some of the best things to do in Iceland are free or relatively inexpensive. Several of the coolest places I’ve visited in Iceland were free to visit, albeit with paid parking. Here are some top picks for your budget-friendly trip. 

Soaking in Wild Hot Springs 

By far, my favorite place to visit is the Reykjadalur Hot Spring Thermal River, a river that is warmed by a series of geysers. The result is a strikingly beautiful wild hot spring river where you can soak in for as long as you’d like for free. The area is fairly built up, with wooden walkways and semi-protected changing areas. 

Be aware that you’ll need to hike to reach the hot springs, and the hike does include a bit of a climb. The hike takes about 90 minutes and is approximately 2.8 miles (4.5 kilometers) each way. 

You can park for a fee at the trailhead. 

Waterfalls and Geysers 

I’ve said it before and I’ll say it again: Iceland’s landscape is one of the top reasons you ought to visit. Two of the country’s most famous spots are also, in my opinion, well worth navigating the crowds to see: Strokkur Geyser in the Geysir Geothermal Area and Gullfoss waterfall. 

Aside from the parking fees to visit Strokkur Geyser, these activities are free to visit and, frankly, unforgettable. Sometimes things are popular because they really are that cool!

Bath in a Public Swimming Pool 

On my most recent trip to Iceland, I met a local woman who was visiting the Hot Spring River with her husband. We chatted for about 30 minutes, during which time I had the opportunity to ask about her favorite restaurant (Friðheimar) and hot spring/spa (Sky Lagoon). She surprised me, however, when she shared her favorite thing to do in Iceland: visit a local swimming pool. 

I must say, she was not wrong. I would never go back to Iceland without visiting the public swimming pools – for about $10 (€12) I was able to use the geothermal pools, sauna, and large swimming pool for as long as I liked. Not only are the facilities amazing, but each community has its own pools and features, so you can try a few to find your favorite. 

Be aware that there are strict rules in Icelandic swimming pools to promote hygiene. You’ll need to bring your own bathing suit and towel, and be prepared to shower before entering the pools. 

Have an Icelandic Ice Cream

The other recommendation from the Icelandic local I met was surprising: she told me that she always looks forward to getting an ice cream after swimming in the pool. Specifically, the Bragðarefur, which is, essentially, the Icelandic version of a McFlurry or a Dairy Queen Blizzard. 

If you, like me, aren’t sure how to pronounce “Bragðarefur,” the Icelandic woman I met told us to ask, in English, for a “frozen fog” ice cream. 

The Bragðarefur I tried was huge and packed with ice cream and lots of toppings – so many that I wondered if I had accidentally ordered two when I only needed one to share. So, a small will probably do when you go to order!

Try a Hot Dog

Believe it or not, one of the most famous street foods to try in Iceland is the hot dog, often served with toppings like onions (fried and raw), pylsusinnep (a sweet brown mustard), remoulade, and ketchup. 

The only veggie hot dog I found was at Pylsuvagninn in Selfoss, Iceland. While other hot dog/snack shops definitely had vegan options, this was the only vegan hot dog that I saw on my trip. Honestly, it was pretty good! 

Black Sand Beaches

Another iconic spot in Iceland are the black sand beaches along the country’s southern coast. For those seeking out the infamous black sands, owing to the country’s volcanic rock, you’ll have several options. 

Reynisfjara Beach, on Iceland’s southern coast, is the beach to visit if you can only visit one. This spot includes otherworldly views, fascinating basalt columns (not quite as cool as the Giant’s Causeway, but that’s what they remind me of!), and you may even be able to see some puffins during their nesting season! This tour from Reykjavik includes a stop at Reynisfjara Beach. 

Your other options include Diamond Beach, which is set along the eastern coast and not far from Iceland’s highest peak: Hvannadalshnúkur. You could also visit Djúpalónssandur Beach on the west coast near Snæfellsjökull National Park and north of Reykjavik. It’s not only beautiful, but the sands contain pieces of old shipwrecks that you can check out while you’re there. 

Note: Iceland’s beaches are prone to dangerous sneaker waves. Take care when visiting and never turn your back on the ocean. If driving a rental car, take care near these beaches, as winds can be so strong that they blow car doors off their hinges!

Hiking and National Parks

One of the best parts of visiting Iceland is seeing the landscapes, so what better way to enjoy it than with a hike? Trails in Iceland are generally well-marked and easy to follow. Still, be prepared to pay for parking at popular trailheads, bring clothing and rain gear for the weather, and carry plenty of water and food. 

Truthfully, the hike I enjoyed most in Iceland was the one leading to the Reykjadalur Hot Spring Thermal River! In my book it is the perfect length and difficulty to feel like an accomplishment without being too strenuous. The downside, though, is that it is quite crowded. 

For another beautiful hike, you can’t do much better than Skógafoss, Steinbogafoss and Skálabrekkufoss – a trail that takes you past 20+ waterfalls. It’s a challenging hike with 1,100+ feet (335 meters) of elevation gain. It tends to be crowded near the trailhead, but keep going and thins out significantly. 

More Money-Saving Tips for Iceland

Aside from the tips I’ve already shared, there are a few other ways to save on your budget trip to Iceland. 

Travel During Shoulder Season

Timing your trip can have a huge impact on the total price you pay, as many of your biggest expenses are subject to dynamic pricing (and, thus, higher prices in the high season). Flights, accommodations, car rentals, and sometimes even tours will vary in price based on demand. So, shoulder season travel can potentially help you save big.

For what it’s worth: May and September just so happen to be my favorite times of the year to travel in Europe. Slightly lower costs, still great (if a little chilly) weather, and smaller crowds are all wins in my book!

Buy Alcohol at Duty Free

One surefire way to increase your budget in Iceland is by ordering beers with your dinner. If you’d like to try some Icelandic alcohol, I recommend picking some up at the Duty Free on your way into the city. Or, failing that, visit a liquor store once you get into town. 

If you want to try something local, you could opt for the licorice-flavored Opal liqueur. My favorite, though, was the Bagl mixed drink with lime, basil, and gin. It reminded me faintly of the Finnish Long Drink, though I must admit that I prefer the Long Drink to the Bagl. 

Pack Snacks and Meals From Home

One of the best decisions I made on my first trip to Iceland was to bring some of my own food and snacks. This helped me save on meals, stay away from grocery stores and shops for longer periods of time, and avoid spending money on foods I didn’t ultimately enjoy. 

Specifically, I’d encourage you to consider bringing instant coffee packets, a backpacker meal or two, and granola bars. One of my fondest memories from all of my travels is heating up a pouch of chana masala from Trader Joe’s in one of the geyser streams at the hot spring river!

Prioritize With Your Budget

To have the best possible experience when visiting Iceland on a budget, one of the smartest things you can do is to be very thoughtful about your purchases. No doubt you’ll have to compromise somewhere, be it an activity you’d like to try, a restaurant, or a more comfortable accommodation. Decide ahead of time what really matters to you, and be ready to cut costs elsewhere. 

For instance, if you really want to see as much as possible without renting a car, an extended tour that lasts 3+ days could be a great compromise. You won’t get to see the Blue Lagoon, but it will include many of the most popular activities, save you on car and fuel costs, and keep you from having to camp. 

Final Thoughts: Can You Really Visit Iceland on a Budget?

Iceland is an incredible place to visit with unforgettable landscapes and natural features. Still, Iceland is a Nordic country with a relatively high cost of living and strong currency, so the costs for travelers are undoubtedly high. The best way to explore Iceland on a budget is to do as the locals do, opting for free or cheap experiences and limiting the number of times you dine out. 

It’s not especially easy – and it’s never going to be inexpensive – but Iceland absolutely can be visited on a budget. Be prepared to make concessions, tough choices, and your own lunches and you will be able to see this incredible island nation without (completely) draining your bank account.