How to Enjoy Iceland on a Budget

Iceland is an island of incredible contrasts, from volcano-lined horizons and inland lava fields to glacial rivers and geysers. It’s one of the most picturesque locations to see the aurora borealis, is home to breathtakingly beautiful nature reserves and will offer any traveller an unforgettable holiday experience that is difficult to match anywhere else.

As much as Iceland is abundant in majestic attractions, it’s also a fairly pricey holiday excursion. That’s why we’ve put together a few tips for enjoying Iceland on a budget by focusing on the best value for money attractions that will still provide the true magic of this beautiful country.

Rent a car to get around

Photo by Tim Trad on Unsplash

Transportation can cost quite a bit when you’re paying for bus trips or taxi rides on a daily basis, even though extended bus passes can be bought that would cover your travel around the island for the duration of your stay. But you definitely need to get around, as there is so much rugged splendor to take in and loads of pretty little towns begging for a visit.

Car rental is by far the most affordable way to travel in and around Iceland and it presents you with the opportunity to construct your own self-guided tours. You might not have an experienced tour guide explaining the history and background of each tourist hot spot, but you will be able to pull the car over whenever you want for picnics and selfies in front of some iconic vista.

1. Solo travelling is good, but if you can do this one with a friend, then do it! The prices will be much more favorable this way.
2. Renting a car or a camper van seems to be the way through. I rented a car with a few friends the last time I was there. It was good to be able to split the cost. Camper vans are also convenient. You can travel, sleep, and prepare meals all in one place. My visit will be all camper van vibes.
3. You can share rides with Icelandic locals if they happen to be going in your direction. You just contribute a small amount to the petrol. It is almost free. Here is the local site: samferda.net – Shea Powell, The World Up Closer

Take a guided tour

Guided tours are generally a lot more affordable than paying for individual elements of Iceland’s highlights. They’re all bundled together in one experience that is shared with others and can be booked according to what your specific interests are. Choose anything from:


Travel to: Iceland 


Take to the streets and feel the lifestyle

Photo by Evelyn Paris on Unsplash

The towns and cities of Iceland are alive with activity and welcoming locals. Take a drive to the ones that appeal to you, park your car (or get off the bus) and roam the streets. There are so many interesting people to meet, exciting installations to see, and tiny pockets of life to explore. Buy food from one of the many outdoor food vendors (hot dogs and sandwiches are in abundance), which is far more affordable than eating out at a restaurant and also puts you in touch with more of the everyday appeal of Icelandic life.

My number one tip is that if you want to drink in Iceland it can be very expensive so buy your alcohol at the duty free shop when you land before you exit the security area. It will be the cheapest that you will find it anywhere else in Iceland. – Cailin, Travel Yourself

For cheap food, you absolutely cannot go past Bonus supermarkets. They are hands down the cheapest places to buy food in Iceland, and skipping a few restaurant meals in exchange for a few cheap supermarket ones will help you save a considerable amount of moolah. Just about every city in Iceland will have a Bonus (or more than one) – just look for the pink pig! – Ellen, Travelling The World Solo

Depending on what’s on special or the best deal you find, buy that in bulk and be content with eating the same thing three or four days in a row (assuming you’re not a foodie of course). Buying larger portions means better deals in theory and you don’t have to think about what you’re eating for the next few days. – Jub, Tiki Touring Kiwi

Investigate whale activity by land

Whale watching tours can range from anything between utterly moving to completely disappointing. They are reliant on perfect conditions and for whales to be in the locations they are expected to be, but obviously this can’t always be the case. The standalone tours are incredibly expensive, and although there is the chance that you could be riding alongside a whale – which is an unbelievable experience – there is also the chance that you won’t.

Photo by Davide Cantelli on Unsplash

If you’re really on a tight budget while visiting Iceland, you should instead invest in a group tour that includes whale watching as one of the highlights. Or you can speak to the locals about the general behavior of the whales and where there have been regular sightings, as they often come up the fjords and quite close to civilization. Seeing whales from land is by no means as captivating as being right next to them in a boat, but if you’re in your own hired car you can follow the whale routes and perhaps get the chance to see something spectacular in the process. Make sure to keep your camera at the ready!

Explore the nature reserves

Iceland’s nature reserves are currently free to explore at your will, giving you endless prospects for adventure. There are three main nature reserves on the island, each holding its own unparalleled beauty:

Snæfellsjökull National Park

Photo by Steven Diaz on Unsplash

  • This park is located in West Iceland and is based around a 700,000-year-old volcano that has a glacier at its summit. Snæfellsjökull is one of Iceland’s most recognisable natural icons.
  • The park is also home to an abundance of lava in different formations including eruptions that have taken place a long, long time ago. Beautiful plant life grows from these interesting formations and is well worth exploring.
  • This is the only national park that extends down to the ocean too.
  • You can see abundant bird life, especially during breeding season.

Vatnajökull National Park

Photo by Davide Cantelli on Unsplash

  • Located on the south-east coast of Iceland, Vatnajökull National Park is a mix of astonishing landscapes that have been carved out of the land by volcanic activity, flowing rivers, glaciers and geothermal activity.
  • Home to the Vatnajökull glacier, the largest ice cap in Iceland.
  • The national park is divided into four separate territories that are individually managed.
  • Vantages include mountains, glaciers, volcanoes, thundering waterfalls and extensive wetlands.

Þingvellir

Photo by Peter Lloyd on Unsplash

  • Located in South Iceland, this national park lies on the Mid-Atlantic Ridge, (one of the only places it can be seen on land) which also marks the border between two tectonic plates.
  • Home to Þingvallavatn, the largest natural lake in Iceland.
  • One of the most popular natural tourist destinations in the country.

Aside from taking leisurely drives (in your hired car), camping under the stars and having picnics in idyllic settings, the outdoor enthusiast will revel in the national parks of Iceland as there’s plenty to do that’s totally free or at least really cheap.

Our best advice for experiencing Iceland on a budget is to forego the expensive trip to the Blue Lagoon and instead join the locals at one of the many city thermal pools. The city facilities feature multiple pools filled with the naturally heated thermal water – at a mere fraction of the price of the Blue Lagoon.

Tip: Bring your own towel so you don’t have to rent one at the pool. Bonus tip: Visiting any of the city’s pools is free with the Reykjavik City Card. – Sarah & Kris, Jet Setting Fools

Fishing

The aquatic life in Iceland is thriving and there are many great fishing spots for the avid fisherman or woman. Small fishing villages hold the old-world charm that many tourists seek out on their trips to Iceland. Fishing can be enjoyed in rivers and lakes or one could try their hand at ice fishing in winter. Anything from atlantic salmon to arctic char or brown trout is in abundance.

Hiking

Take a hike around and up the dormant volcano, Snæfellsjökull. Glacial crevasses must be avoided and the best time to do the hike is during summer, where this kind of visibility is best. Long walks and hikes can be done along the Mid-Atlantic Ridge, which is an area of huge geological significance.

See the aurora borealis

No trip to Iceland is complete without a sighting of the aurora borealis, one of the most captivating natural occurrences that everyone should see at least once. The best time for viewing them is from September to April (when nights are fully dark), but sightings can be elusive so one needs to think of it as the cherry on top of an already perfect holiday. The best conditions for possible sightings include total darkness, no rain, and no snow. According to experts, the lights tend to be active for two to three days and then die off for a few more days, sometimes five or six. If you’re staying for a seven-day trip or longer, your chances of catching the northern lights in all their glory are quite good.

Avoid restaurants and cook your own food. Also, go when it is not summertime. Shoulder seasons like October are the best, and sometimes results in prices up to half off of summer prices. Plus, you have a much better chance of seeing the northern lights! – Kristin, Be My Travel Muse



If you have hired a car, take a night drive to somewhere remote where the light pollution won’t affect your visibility. Take in the darkness, revel in the cold as the perfect sightings are often on the coldest nights and wait for the moment that could quite possibly change your life.

 

Want to learn more?

See our Iceland Guide