Tips for Traveling Iceland on a Budget • The Blonde Abroad

Tips for Traveling to Iceland on a Budget

Iceland is one of the best destinations in the world for all types of travelers, but it’s also expensive. While you’ll need more in your daily budget to pay for daily living expenses, it’s possible to explore the island on a shoestring.

Here are my top tips for visiting Iceland on a budget!

Visit Iceland as a Layover

You can get a free stopover in Iceland with Iceland Air. It’s a natural air route between North America and Europe, giving you the chance to explore one of the world’s top travel destinations for a few days.

With so much to see within close distance of Rejkavik, you don’t need that long to see Iceland’s major highlights. You can explore the famous Ring Road and the Blue Lagoon in 24 hours!

If you’re traveling on a budget, look out for cheap airfares with WOW Airlines. They often have super affordable flights from the U.S to Iceland.

Read More: How to Make the Most of an Iceland Stopover


Travel to Iceland in a Group

One of the easiest ways to cut costs on travel to Iceland is by planning a group trip. You can split costs for an apartment, car rental, and food, making it a more affordable destination than if you had to explore Iceland as a solo traveler.

If you are planning a trip to Iceland alone, don’t let the prices scare you off.  Iceland is an incredible country to explore as a solo traveler; you just need to have a bigger budget for daily expenses.

Read More: The Solo Female Traveler’s Guide to Iceland

Iceland Ring Road

Buy Duty-Free Alcohol

One of your biggest expenses in Iceland will be alcohol. With high taxes on the spirits, beers, and wines, you’ll end up paying a lot more for a drink than you would back home.

The best way to get around this is to buy your alcohol in the duty-free shops on arrival at Keflavík International Airport. Otherwise, you can have a self-imposed “dry” vacation to cut back on costs.

blonde eating shark

Make Your Own Food

During my first trip to Iceland, I stayed in an Airbnb and on my second trip we hired a campervan. Both times, I prepared two meals a day.

For breakfast, I usually ate skyr yogurt (it’s a local Icelandic brand that is delicious and inexpensive) with some granola, then depending on my itinerary for the day, I’d either make a packed lunch or cook myself dinner.

By only eating out once a day at cafes and restaurants, you’ll have more room in your budget to splurge on activities!

Read More: Eating Rotten Shark in Iceland


Stay at Bed & Breakfasts

You’ll save a lot of money by staying in Bed & Breakfasts rather than at hotels. Look for guest houses that include breakfast, so it’s another meal that you don’t have to worry about.

Visiting the Blue Lagoon

If you’re planning to do the Ring Road, consider going to the Myvatn Nature Baths rather than the Blue Lagoon.

If your heart is set on the Blue Lagoon, I recommend getting the cheapest “Comfort Level” package. It includes your base admission, and you can use all the mud you want at the lagoon.

To get your money’s worth, I would go first thing in the morning and stay until it closes.

Read More: Visiting the Blue Lagoon in Iceland

Seljalandsfoss Waterfall

Drink the Tap Water

Iceland has some of the cleanest water in the world. You can pretty much drink straight from any stream or tap you come across in the country.

So, when you’re packing for your trip to Iceland, make sure you bring along a reusable water bottle. It will save you a ton of cash!

Read More: What to Pack for a Week in Iceland

Enjoy the Free Activities

One of my favorite things about Iceland is that there are tons of free geothermal areas! You can find a full list of spots on Hot Pot Iceland and spend hours relaxing in the warm water.

Here are some free activities you can add to your bucket list:

  • Visit the Sun Voyager
  • Explore Reykjavik’s street art scene
  • Wander around Elliðaárdalur Valley
  • Head north and try to catch a glimpse of the Northern Lights
  • Visit Reynisfjara Black Sand Beach
  • See the wreckage of the US DC-3 Airplane
  • Meet an Icelandic horse

Read More: The Beginner’s Guide to Photographing the Northern Lights

Jökulsárlón Glacier Lagoon

Rent a Car

It can be cheaper to rent a car and self drive the Ring Road or Golden Circle rather than joining a group tour. Alternatively, it can be cheaper to join a tour if you’re not going to do the full Ring Road and rather base yourself in Reykjavik.

Before booking a tour or renting a car, add up the costs and see which one is the most cost-effective for your itinerary.

Read More: The Ultimate Iceland Ring Road Itinerary


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