Iceland is expensive. 

My Iceland Budget - how to save money in Iceland. Iceland money saving tips and tips for how to tarvel Iceland on a budget. From budget flights to budget iceland accommodation, this iceland budget guide has you covered! #icelandbudget #budgeticeland #1weekicelandbudget #icelandcosts #icelandmoney #savingmoneyiniceland
There’s no avoiding it. Iceland may even be the most expensive country you will travel to. But it’s not all doom and gloom. It’s actually relatively easy to travel Iceland on a budget – if you know how that is! I’m here to share my own Iceland budget and show you that it IS possible to take a budget Iceland trip if you are willing to make a few adjustments to your normal travel style. Use this Iceland budget as a guide to help you plan your own affordable trip and save money in Iceland. Regardless of whether you are a shoestring backpacker of a luxury holidaymaker, you will want to get the most bang for your buck in Iceland and I can show you how! You may also want to consider joining my Facebook group, Iceland Tips & Advice. Here you can ask any question about Iceland and have it answered directly including how to save money in Iceland! You can join by clicking HERE
iceland is expensive - pot of gold coins spilling out

So Iceland is expensive? Is it worth it?

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Well ,t his is only a decision you can make based on your own financial situation and how much you love seeing beautiful scenery. But for me, yes visiting Iceland was absolutely worth the expense. There is nowhere quite like Iceland. The landscape is so unique. You will want to pull over every few minutes on the road to take yet another photo. Not only that but the beautiful scenery is always changing. One minute it’s moss-covered lava fields, the next its grand sweeping black beaches and the next its huge waterfalls tumbling over steep cliffs.
Sunset at Kirkjufellsfoss on the snaefellness peninsula in icleand. a conical mountain sits behind 2 small waterfalls and the sky is a blend of purple, yellow and pink tones.
I spent 8 days in Iceland and it was not nearly enough time. Yes, I saw all the main highlights and attractions along the ring road but I want to see it all again and photograph it in different weather and light conditions. I want to take more hikes, make more random stops, explore the highlands and the Northern peninsulas. I am quite sure I will be back. Iceland is already pulling me back like an invisible force.  So I guess I’d better start saving again…

How to save for a trip to Iceland

Saving money for travelling isn’t easy but it is easier to save when you have a goal and what better goal than travelling to the land of fire and ice?! I find by making small changes like having fewer takeaway drinks, ditching the gym membership for exercise outdoors and cooking for friends instead of eating out are great ways to save for travel without compromising on lifestyle. I make use of money-saving websites like vouchercloud and topcashback to save money on meals out, shopping and big one-off expenditures like car insurance. If you have a spare room or spend lots of time away from your home, you could consider renting a room or your whole property on Airbnb. For more tips, see my guide for saving money for travel.
iceland cost of travel - money on a world map

How much do you need to save for a trip to Iceland?

My 1 week Iceland budget.

I was in Iceland for just over 1 week – 8 days to be exact. In 8 days my total Iceland expenditure was £1208. Of this, £176 was on spent splurging on activities. So £1032 was spent on necessity items such as accommodation, food and transport. My Iceland budget can be broken down like this;
  • Flights £135
  • Accommodation £340
  • Car hire £140
  • Petrol £140
  • Food & drink £275
  • Activities £176

I tried to travel Iceland on a budget but I did splash out on the occasional luxury and I had the occasional meal out. So if you are on a very tight budget, it would be possible to keep to a budget of £100/day including flights from Europe. My own Iceland budget was a little more relaxed at £150/day allowing for a few luxuries along the way.

How to keep to a Budget in Iceland

Saving Money on Flights to Iceland

The good news is that whilst pretty much everything in Iceland is expensive, getting there is actually quite affordable thanks to Wow airlines making Iceland their main hub. It’s also on the main flight path between the US and mainland Europe which allows for the possibility of having a prolonged stopover in Iceland saving yet more money by combining it with another trip. Wow, Easyjet and AirIceland all offer budget flights between Iceland and mainland Europe keeping prices competitive. However, bear in mind that many of these budget airlines have hidden fees such as hold luggage which can sometimes add up and make flights more pricey than first envisaged. I recommend using a flight comparison website like Skyscanner but manually compare the lowest priced airlines to check which is actually cheapest when luggage has been added on. If you are able to travel light and don’t have a ridiculous amount of photography gear like me, then you could consider taking hand luggage only to save more money and stick to your Iceland budget.
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For more flight money saving tips, read ➡️How to find super cheap flights
iceland cheap flights - picture of mountains out of airplane window

Saving money on accommodation in Iceland

Hotels in Iceland are eye-watering. If you are staying more than a few nights, the cost of accommodation can quickly rack up. I read an article recently about how one travel blogger spent £10, 000 on a week in Iceland recently. Most of that money went on fancy hotels. But in reality, how much time are you actually going to spend there?  Can you justify the cost of a posh hotel where you will spend barely any time?!

Accommodation Prices in Iceland

(as of September 2018)

  • £12-15/night plus around £43/night camping equipment hire. Total £55
  • £70/night for a basic campervan (plus campsite costs)
  • £180/night for a luxury motorhome with its own bathroom (plus campsite costs)
  • £30-45/night for a hostel
  • £80/night for a single room in a basic guesthouse.
  • £80/night for a double room in an Airbnb property
  • £100-120/night for a whole Airbnb apartment
  • £100-120/night for a basic double hotel room
  • £200/night for a boutique hotel room.
The best hostels in iceland - budget accommodation on the ring road
On the surface, from this list, it looks like staying in a hostel is the cheapest way to save money on budget Iceland accommodation. However, take into consideration this is based on hiring ALL your camping equipment. You can easily save some money by bringing your own sleeping bag or thermorest and you could consider ditching the more luxury items like a camping table and chair. You can also save money on food by camping or staying in a campervan and this needs to be taken into consideration when budgeting for your trip to Iceland. It’s important to also consider the time of year you are travelling. It can get very cold in the winter so camping may not be an option. In which case, staying in hostels becomes the cheapest way to travel in Iceland on a budget. It’s a great way to meet people and most hostels have great kitchen facilities so you can do your own cooking and keep costs down. Read my Hostels in Iceland guide for tips on which hostels to stay at along Iceland’s ring road. If you decide to book a campervan, I suggest using Motorhome Republic. They offer the best price guarantee and a massive variety of styles of campervan from basic and budget to flashy motorhomes with bathrooms. If you are planning to camp but need to hire your equipment, you can do so at Iceland-camping-equipment.com If you do decide to flash the cash on a hotel, guesthouse or private home, make sure you get my discount for Airbnb and booking.com.

The hostels and guesthouses where I stayed were…

Top Tip! If you are planning to stay in a lot of Hi Hostels, it may be worth getting the Hi membership card. It costs $18 for a years’ use and saves you 10% of the cost of Hi hostels globally which may help you keep to your Iceland budget!

Camping Equipment to factor into your Iceland budget.

If you do decide to camp, there are several things you may want to consider either buying or renting. Since camping equipment rental is charged by the day, if you are visiting for more than a week and have enough luggage allowance, you may want to consider buying some of this in advance. You’ll save in the long run, especially if you will be doing more camping! Things you are likely to need to rent (or buy) which you will need to factor into your Iceland budget.
  • Tent – best to choose an all-weather tent like this one even if you are visiting in summer – Iceland is unpredictable!
  • Sleeping bag – Don’t scrimp on this one – Iceland can get VERY chilly! Down sleeping bags give additional warmth without weighing you down too much!
  • Thermarest – save your back and keep warmer at night with a Thermarest! I bought one before my camping trip to South America – the best thing I bought!
  • Cooking set – Go for something collapsible and lightweight like these pots and pans.
  • Camping stove – go for something lightweight. Often left over gas canisters can be found in campsites so don’t rush out and buy too many when you first get there! This may be another easy way to save money in Iceland.
  • Camping dishes/cutlery set – buying yours in advance may save money here as rental costs around €3 per day! This set is biodegradable and environmentally friendly!
  • Car Power inverter with USB  – make sure your camera is always charged by ensuring you have access to electricity on your Iceland road trip.
  • Cooler – save money in Iceland by cooking your own food. Renting a cooler will save your Iceland budget in the long run!
  • Table and Chairs – skip hiring these if you’re happy to rough it a bit and save money!
  • Wifi hotspot – stay connected with the world even in remote Iceland!
iceland camping northern lights

Saving Money on Transport in Iceland

I personally feel the most cost-effective way to get about Iceland is by hiring your own car or campervan. Whilst it may seem like an initial owch, it actually doesn’t have to be too expensive. I hired my car with Procar through Autoeurope. It cost me £142 for 8 days and was a small 2X2 but with all the mod cons such as blue tooth and a reverse camera. You may see plenty of other Iceland budget articles quoting much higher costs to hire a car. This is because they include fully inclusive car insurance. Now don’t get me wrong, you NEED this in Iceland, but you don’t have to buy it directly from the hire car company!
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I have an annual car hire insurance plan which covers me for any trip I take in Europe for an entire year. At just £40, I would have made a huge saving on this trip alone (£130 to be exact) but I also used it for my road trip in Sicily, making this an ABSOLUTE BARGAIN!

You can save money in Iceland by hiring a 2×2 car rather than a more pricey 4×4. I managed just fine with a 2×2. There were occasional roads where I had to take extra care (make sure you have gravel protection) but Icelandic cars are robust with good tyres. However, if you are planning to go into the highlands or spend a lot of time off the beaten track, then you may want to get a 4×4 instead! I also think it may be worth considering if you are going in the winter when the weather is more likely to be very wet or snowy.
4x4 in snow

I also recommend saving money on GPS and instead, downloading a free app on your phone called maps.me. Download the Iceland map and voila, your phone is now your free GPS and doe not require any internet to use! Just buy a phone holder for the car and you’re good to go! Saving = £10 per DAY!

Additional costs to factor into your Iceland travel budget

Be warned, there are tolls in the mountains… Yes tolls not trolls but who knows, maybe there’s both? Iceland is full of rocky volcanic landscapes and as such there are many mountain tunnels which require you to pay a toll. Surprise surprise, Iceland road tolls are expensive. Research your route and consider taking the scenic route if time allows… Petrol in Iceland isn’t cheap. Your reaction to fuel costs really depends on which country you are coming from. I live in the UK where fuel isn’t exactly cheap as chips either and I found it not dissimilar to the prices I pay here. However, I spoke to many people from the US who were blown away by how pricey it was! I paid £140 petrol to travel the entire Iceland ring road. This is 1346Km however with a few little detours, it was close to 1800Km. You need to consider the size of your vehicle and engine and the number of passengers. I was travelling solo in a small car which was very economical on fuel.
iceland ring road itinerary map
Do not get caught speeding in Iceland. I’ll be honest with you, I did. It’s actually hard to stick to the speed limit at times especially in the North where the speed limit is 90KPH and some of the roads are straight, wide and empty! I’m used to a much higher speed limit on similar roads in the UK. (90kph equates to 55mph.) I was going just over the limit when I got pulled over by a police car. It was not my finest moment. It also cost me an absolute fortune! Fines are 5000ISK (about $500) but you can save 25% by paying up front. It cost me a painful £270. I’d imagine the fines would be even higher if you are going significantly over the speed limit. If you get caught by one of the many grey box cameras, the fine will go to your car hire company and you will get charged an additional handling fee. The moral of the story, DO NOT SPEED IN ICELAND!

Other ways to get about Iceland on a Budget…

Whilst there are private and public buses in Iceland, I rarely saw them and so I’d imagine they don’t run so frequently. If you’re travelling in Iceland on a strict budget, you may want to consider saving money by hitch-hiking. I wouldn’t usually endorse hitch-hiking, however, Iceland’s crime rate is so low that it might be less risky than in other countries.  I would, however, encourage you to listen to your gut instinct if you don’t feel comfortable and make sure someone always knows where you are at all times!

You also have the option to base yourself somewhere and take day tours. This may be the cheapest option for a very short break but if you are spending several days in Iceland then I’d recommend getting your own transport. I generally use Get Your Guide to find great day tours.

Another option to consider is joining a group adventure tour. It’s certainly not the cheapest way to travel Iceland and may stretch your Iceland budget considerably BUT you can skip all the organisation and get transported around to all the best places whilst making new travel friends for life. I chose to travel Iceland solo but I have travelled with G Adventures many times before and would recommend them as a company you can trust. Check out their Iceland Tour Options.

Saving Money on Food and Drink in Iceland

The cost of food and drink is sky high in Iceland. Eating out can cost between £30-50 per person for 1 meal. Even fish and chips or a pizza will set you back almost £20!

Alcohol is just as pricey. Even in my hostels, I paid £8 for a small glass of wine. The beer was about £7. You may have to sell a kidney to afford a night out on the razz! Fortunately, I had the heads up before I travelled to Iceland and found ways to save money on food and drink in Iceland. Here are my top tips.
  • Bring food from home. I bought a bag of pasta and some pasta sauce stir in sachets. This saw me through several evening meals in my hostels. I also bought plenty of cereal bars and had these instead of breakfast. Fruit and veg are just as expensive so I had packets of freeze-dried fruits which I ate as snacks along the road.
  • Buy your food from budget supermarkets in the cities. Food will always be more expensive at convenience stores in the smaller towns so stock up on tinned foods, fruit and veg at a supermarket before you leave Reykjavik.
  • Drink the water. Icelandic tap water is delicious and completely safe to drink. If you get bored of water like I sometimes do, then I suggest bring a Robinsons squeezy squash. They are super concentrated so you don’t need more than a drop or two and can fit in your hand luggage (they are < 100mls.) One of these should last your trip. I love my collapsible water bottle which is leak proof, hold 1L water and folds up small for when it’s empty!
  • Get your alcohol from duty-free.  Alcohol costs a bomb and you’re unlikely to be having many ‘nights out’ in Iceland so if you like a beer in the evenings, stock up at the airport before your flight.
  • Eat hotdogs. Probably the only low priced meal you can get in Iceland. It’s not exactly nutritious but it is tasty! You will no doubt have a few of these during your trip!
  • Eat soup for lunch. The next most affordable option on most menus will be soup. I had some really tasty soups with delicious hunks of bread for a few lunches. Affordable-ish and nice and warming if you get bad weather in Iceland!
  • Try to avoid eating out but if you do choose fish and chips or pizza! Yes, they’re not the healthiest options and as a doctor, I shouldn’t really be endorsing unhealthy meals like this! But pizzas, burgers and fish and chips are a few of the slightly more affordable options on most menus. And if you’re only in Iceland for a week or so, it’s not going to kill you..!
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Save Money on Tours in Iceland

Fortunately, Iceland has loads of free things to do. Most of the national parks do not charge an entrance. Occasionally they charge for parking but you can usually find a free car park near-by and walk the last bit! There are also loads of free hot springs so you do not have to pay for entry to the blue lagoon! That said I loved The Blue Lagoon and felt it was worth splashing out on (get it?!) If you do decide to take day trips, I recommend shopping around to find the best deals. I usually recommend starting with Get Your Guide. They have a great selection of tours in Iceland and I have an article about the best day trips from Reykjavik which you might enjoy reading. It can be worth looking on Groupon for some great discounts. You can often grab a bargain bundle including flights, hotels and activities in Iceland for a fraction of the price you would pay if you booked them all individually! Consider getting the Iceland coupon book to help you travel Iceland on a budget. It costs about $10 and is available on AirIceland flights and at some car rental companies. It offers discounts on activities and food and drink all over Iceland so if you are staying for a week or so, it’ll work out cheaper to invest in this 1st! You can also download an app for this making it super convenient!

Other Ways to Stick to your Iceland budget

There are a few other things to consider to help you keep your Iceland travel costs low. Heres a few things to think about!
  • Consider going off-peak season. Car hire and accommodation costs, even admission to The Blue Lagoon, is often significantly discounted in the off-peak season. Plus Iceland in the winter is just gorgeous!
  • Travel with friends. This one is kind of obvious but sharing the cost of a car or campervan will save you plenty of $$$!
  • Budget for the unexpected. There were several places in Iceland where you even have to pay for the privilege of going to the toilet! And it’s not cheap! In one place, it cost me £2 just to have a wee in a public restroom!
  • Consider getting a currency card. You won’t get charged a fee for using it unlike with your regular debit or credit card. Though be aware these may not be accepted at petrol stations. I love my EasyFX card which goes everywhere with me when I travel!
  • Make sure you have a chip and pin card with you for refuelling. The petrol stations operate by chip and pin card only so you can’t pay with cash at many of them!

I hope you’ve found this article useful for helping you plan your Iceland budget! Travelling Iceland on a budget isn’t necessarily easy but it is worth it! Making a few small sacrifices on food and accommodation can be the difference between an affordable trip to Iceland and not being able to afford to go at all

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Join my Facebook group for loads more tips about travelling in Iceland! Ask any of your Iceland questions and find plenty more money saving Iceland tips! You can join by clicking HERE. Do you have any other tips to help save money in Iceland? Do you have any questions? I’d love to hear from you in the comments below! If you’re feeling super generous, I’d love it if you could share this article with your friends and family using the social buttons and pins below! Thanks, you’re a legend!

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