Destinations,  Europe,  Iceland

Iceland on a budget

Visiting Iceland on a budget has never been easy but in recent years, Iceland has become more affordable for visitors who wish to explore the breathtaking natural scenery of the ‘Land of Fire and Ice.’


Is Iceland expensive?


The short answer is yes. And no!

For example, eating out and drinking alcohol is prohibitively expensive but there are money-saving tricks that can help you.

There are luxury, budget-busting hotels but there is also a wide range of affordable self-catering accommodation.

And though you may pay a high price for sleeping and eating out in Iceland, the main attractions of Iceland – the stunning national parks – are free to enter and explore.

Iceland flag and hilly landscape, Iceland on a budget



When is the best time to travel to Iceland on a budget?


The time of year you travel to Iceland can affect your budget.

Travelling to Iceland in winter will give you wonderful wintery landscapes but the days are short, dark and very cold.

Cold weather puts pressure on a budget with the need for hot drinks and indoor activities (think entrance fees)!

Plus, you may not feel confident driving in snowy and icy conditions so may resort to joining a guided tour. Tours will be more expensive than self-driving if you are travelling as a group or family.

Alternatively, visiting Iceland in the summer will mean long, light days for sightseeing. But it is a popular time of year for tourists so accommodation prices may increase.

Help your budget by travelling in the shoulder season. In Spring or Autumn accommodation will be in less demand, will cost less and you can make the most of Iceland’s free to access outdoor activities.

Plus, you may still see the Northern Lights which are often best viewed around the Spring and Autumn equinoxes.



Iceland on a budget


Getting to Iceland on a budget


Spend time searching the internet for flight deals and cost-cutting tricks.

Play around with flight comparison sites such as Skyscanner to find the cheapest airport to depart from, the cheapest day of the week and the cheapest time of day.

Sign up for airline seat releases and book in advance to secure cheap fares.

Consider flying at unsociable times.

The national carrier, Icelandair, offers free stop-overs in Iceland on its transatlantic routes.

Budget airlines, such as Easyjet, fly to Iceland from many European destinations.

For extra savings, wear your bulkiest clothes and boots and travel hand luggage only! Be sure to pack carefully for Iceland to avoid unnecessary purchases whilst you are there. Forget your gloves at your peril!


Top tip – if you are flying from the U.K to Iceland at night, sit on the right-hand side of the aeroplane facing the cockpit for your best chance of seeing the Northern Lights. We were rewarded for our cheaper, late-night arriving flights by a fabulous display of the Northern Lights from the aeroplane window!  



Getting around Iceland on a budget


Public transport in Iceland

Use public transport where possible; taxis are very expensive!

There are cheap, fast public transport connections from Reykjavik and Akureyri airports to the centres of both cities.

Plus, Reykjavik and Akureyri are small, compact cities which are easily navigable on foot or by bus. You do not need to hire a car for city centre sightseeing.

Icelands’ public buses are reliable and efficient. Bilingual timetables and fares are displayed on bus stops.

Iceland on a budget

On local and city buses, children under 6 years old travel for free whilst children aged 6-17 years old are half the adult price.

You will need the exact fare for the bus; you will not be given any change!

In the summer season, it is possible to buy countrywide bus passes for bus travel to and from popular hiking locations or to the south coast thus avoiding the need for guided tours or car hire.


Top tip – Consider downloading the app for the Strateo bus company. You can pay for your fare using this free app thereby avoiding the need for exact change.



Budget car rental in Iceland

If you are travelling as a family or in a group, consider hiring a car and road tripping rather than booking a tour.

Icelandic roads are well signposted, in excellent condition and self-driving allows you to explore at your leisure. Make sure you familiarise yourself the rules and regulations for driving in Iceland.

However, car hire is very expensive in Iceland so shop around for the best deal.

Driving in winter will need extra preparation (such as snow tyres and snow chains) which may cost extra. You need to be a confident winter driver to drive in Iceland in winter.  The weather can change quickly and unpredictably and roads may not be cleared.

You do not need a car if you are visiting Reykjavik – it is a small, compact city and parking is limited and expensive. Travel from the airport by public bus and wait until you have completed your city centre sightseeing before hiring a car.

family standing in front of car, budget trip to Iceland

We hired our car from SADcars.  At the time we visited, SADcars was one quarter the price of other car hire companies.

As the name suggests, the car was, well, a bit sad! It had no sun visors, no foot mats and no air conditioning but it was roadworthy, reliable and had the all-important radio for long road trips!


Top tip – avoid toll roads if you can. We drove through the Hvalfjorour toll tunnel to Akranes and it cost us an eye-watering 8 Euros each way for a short 5km drive.



Iceland Tours

Don’t immediately dismiss tours in Iceland as too expensive, especially if you are a solo traveller or a single parent traveller.

For families, children under 11 are free with some tours and tours may work out cheaper than hiring a car.

Plus, everyone gets to sit back, relax and savour the stunning views!

Tours are also a good choice for a night time trip chasing the Northern Lights. You will be driven by people who know the roads and who know where good light spotting locations are.

Always shop around for the best deal and don’t be afraid to ask for a discount if you are travelling as a group or in offseason.



Iceland accommodation


There are several options for accommodation in Iceland.


Self-catering in Iceland

Self-catering and cooking for yourself is probably the best way to visit Iceland on a budget.

Whether you choose to stay in an apartment, an Airbnb or a hostel, make sure you have access to cooking facilities. You can read about our tips for Airbnb here.

There are large and small supermarkets throughout Iceland such as Bonus, Netto and Kronan. The Bonus chain was the cheapest supermarket we found.

We stayed in an Airbnb house on the outskirts of Reykjavik. Staying outside the city centre and travelling in by public bus was much cheaper than staying in the city itself. We had a great kitchen plus the added bonus of a washing machine and tumble dryer.

Top tip – Supermarket prices in Iceland will make you feel dizzy so bring as much packaged food from home as you can! Our hand luggage was crammed with porridge, cereal bars, pasta, tea and hot chocolate.

No noisy neighbours here…


Camping in Iceland

Budget-friendly campsites are found all over Iceland but camping is very weather dependent! And unless you are willing to pay expensive hire prices for camping equipment, you will need to bring your own equipment from home.

An alternative option is to compare the cost of a rental car plus accommodation against the cost of renting a campervan or motorhome. Again, this is a weather dependent option and prices soar in summer.



Iceland has an extensive hostel network and is an affordable budget option for solo travellers or couples.

Check in advance whether you will be charged for bed linen and if so, consider bringing your own bed linen or sleeping sheet.

Most hostels do not allow children to stay in dormitories unless families book out the whole room. Depending on the room size, hostels may not be a budget-friendly option for families.


Hotels in Iceland

Shop around on comparison sites such as or for the best prices.

Choose a Icelandic hotel which includes a plentiful breakfast. Carrying out a little extra will also cover your lunch!

Top tip – larger families should research hotel chains that allow five to stay in one room. (We choose Radisson Blu for this reason).  Plus, their breakfasts are wonderful!




Eating out in Iceland

Eating out in Iceland is very expensive, especially for families.

Shop around for the best deals which are usually offered for lunchtime and early evening menus. Soup is often the cheapest item on the menu and is hot and nutritious!

If you are not a vegetarian, learn to like Icelanders most popular snack – the hot dog. Hot dogs are available everywhere – on the street or over the counter in grocery shops. They are cheap (around £2.50), hot and filling and work out cheaper than buying food to make sandwiches.

If eating out is important to you, consider purchasing Icelandic Coupons. These coupons are available to view online before purchasing and provide discounts to restaurants, bars, shops and attractions throughout Iceland.


Drinking in Iceland

Drinking alcohol in Iceland is very expensive. Again, look out for early bird deals or happy hours – as long as you are over 20 years old!

Buy your alcohol in the supermarket or at the duty-free shop at the airport as you enter Iceland. We had a dry visit to Iceland as all these options were pricey!

In cold weather, a quick stop each day to warm up with a hot drink will quickly bust your budget. Pack a small flask in your luggage and bring your own hot water or coffee out on your day trips.
If, like me, you need caffeine every two hours, carrying a small flask of coffee (or hot chocolate for the kids) will save you a fortune.

Plus, if you are driving to the south coast of Iceland or completing the Golden Circle from Reykjavik, there are very few places on these routes to stop for a hot drink.

Don’t forget tap water is safe to drink. Bring a reusable water bottle to make the most of this free resource.


Iceland sightseeing on a budget

There are few places in the world where sightseeing is more affordable than Iceland. If you choose selectively based on your budget, you can sightsee very cheaply in Iceland.

Guillfoss, The Golden Circle, Iceland
Be prepared to get wet at Guillfoss!

Natural attractions

Spend your time outdoors and your budget will thank you. Explore the stunning waterfalls, windswept beaches and wild landscapes of Iceland for little or no expenditure.

Icelands’ national parks are free to enter. You do not need a ‘parks pass’ as in other countries nor do you need to pay individual entrance fees. Even parking is free at the majority of locations.

And at attractions where you do have to pay a nominal entrance fee, such as the Kerio Crater, children under 11 are free.

Try to visit and park responsibly. Iceland experiences enormous visitor numbers each year and there is pressure to introduce national park fees to combat the environmental damage done by visiting tourists.

Do not feel you have to do every experience going – guided glacier walks and snorkelling between the tectonic plates are incredible experiences but will break your budget.

You can read about our visit to the Golden Circle and the south coast of Iceland here.


City sightseeing

Wear comfortable shoes and explore Iceland’s small cities of Reykjavik and Akureyri on foot.  Avoid the need for taxis and even public transport.

If you do wish to visit every attraction on offer, consider purchasing the Reykjavik City Card which provides free and discounted entrance to museums and attractions plus free city centre bus travel. Always price compare buying a card to the one-off entry fees for your ‘must do’ attractions. Tourist cards such as the Reykjavik City Card work on a time frame, so be realistic about what you will actually have to time to visit in 24 or 48 hours before purchasing a card.

Before visiting fee-paying attractions, look for special free days or discounted visiting times.

Join one of the many free, donation based city walking tours. We did a brilliant two hour walking tour in Reykjavik and learnt so much about Icelandic culture and history.

You can read more about how we visited Rekjavik on a budget here.


Visiting the Blue Lagoon in Iceland on a budget

The iconic Blue Lagoon located just outside Reykjavik is a must-do attraction for many visitors to Iceland.

However, it is an expensive attraction and always very busy.

If the Blue Lagoon is a must-do attraction for you, book online well in advance. You will have to commit to a date and time slot and must adhere to these. You will not get into the Blue Lagoon if it is full – as we found out when we visited!

Try to visit early in the morning or late in the evening as these time slots are cheaper. Visiting at these times will save you around 20 Euros PER PERSON!

Families should not dismiss visiting the Blue Lagoon due to expense. The Blue Lagoon is one of those rare places where families are not penalised; children are free up to the generous age of 13. All three of our children got in for free with just one paying adult. Children under two are not allowed into the lagoon itself.

Top tip – Budget conscious travellers should not plan to eat or drink at The Blue Lagoon – it is very expensive!  Also, make sure you generously apply the free hair conditioner available in the changing rooms before entering the lagoon. The conditioner protects your hair from the silica in the Lagoons’ water. The silica is good for your skin but not your hair; our hair felt like straw for weeks after our visit.

You can read more about our trip to The Blue Lagoon here.

If your budget does not stretch to visiting The Blue Lagoon, there are other outdoor, thermally heated pools around Iceland (although not silica-rich like The Blue Lagoon). Visit Iceland has a comprehensive list of hot springs around the island.

Plus there are lots of public, outdoor, heated swimming pools. These public pools are open to all visitors and very good value for money. Read about our family trip to an Icelandic public pool here.



And one final top tip for planning a budget trip to Iceland….

Know the current exchange rate and familiarise yourself with the Icelandic krona notes and coins.

Conversion mistakes are easily made and can be very costly. I speak from experience!!!


We loved our budget family trip to Iceland and would love to return one day to road trip Iceland’s ring road.  If you have any tips or tricks for visiting Iceland on a budget, please get in touch and share them with us!

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