As Iceland has exploded in popularity over the last few years, many travelers still haven't made the trip because they don't think it's possible to visit Iceland on a budget.
But while it's certainly true that Iceland can be incredibly expensive, it's a lot more affordable than you think. You just need to be sure to plan carefully and decide what's really worth spending money on (hint: it's not fancy hotel rooms or expensive nights at the bar).
So if you want to experience the out-of-this-world natural beauty of Iceland without going broke, read on for our top money-saving tips for visiting Iceland.
Iceland on a budget: Know before you go
A layover you'll actually enjoy
Icelandair's free stopover program is a great way to get a taste of Iceland for 1-7 days on the cheap if you're already crossing the Atlantic.
Bring some friends
Between car rentals, accommodation, and home-cooked meals, you can really cut down on your Iceland expenses if you go as a group.
Bring a bottle
Iceland has some of the best drinking water in the world. Instead of wasting all of that money (and plastic) on expensive bottled water, be sure to pack your reusable bottle.
Buy booze at the airport
Or you can plan for a "dry" trip. Due to high taxes on spirits, wine, and beer, alcohol is more expensive in Iceland than back home. Your best bet is to grab a bottle at the airport duty-free shop.
Free and cheap things to do in Iceland
Skip the pricey Blue Lagoon
The famous Blue Lagoon is no doubt at the top of your Iceland bucket list. But while the Blue Lagoon is stunningly picturesque, the problem is that it’s at the top of everyone else’s too. Plus, with the cheapest package costing over $50, it’s not exactly a budget option.
Iceland tons of other geothermal pools and hot springs, either paid or free. These free hot springs in Iceland may lack facilities like bathrooms and changing areas, but they’ll keep money in your pocket.
Take the Ring Road to Iceland's top attractions
At over 820 miles long, Iceland's famous Ring Road takes you around the entire country, allowing you to witness all of Iceland’s most stunning attractions, from Seljalandsfoss Waterfall on the South Coast to the incredible crystal ice caves under the Vatnajökull glacier
Because Iceland isn’t that big, you could drive the Ring Road in just 12-13 hours. Of course, you’re going to want to take your time, so it’s recommended to take 7-10 days to drive the full route in the spring, summer, and fall and up to 2 weeks in the winter.
See a US navy plane wreck
In the 1970s, a US Navy Aircraft crash-landed on an Iceland beach and has been sitting there ever since. Fortunately, everyone survived.
A lot of decay (and some thievery) has occurred in the decades since the crash as the plane has become a popular attraction. It’s slightly off the beaten path and a bit of a walk out to the plane (2.5 miles each way, drive-ups no longer permitted), but those who’ve seen it say it’s worth the trek.
Drive the Golden Circle
If you don’t have a week to spend on the Ring Road, driving Iceland’s famous Golden Circle is a great option. This circular route takes you from Reykjavik to three of Iceland’s most famous attractions – Thingvellir National Park, the Geysir Geothermal Area, and Gullfoss waterfall. Best of all, they're all free!
The Golden Circle is 190 miles round trip from Reykjavik and can technically be covered in as little as 3 hours. Of course, you’re going to want to take the full day to stop and truly appreciate the sights so plan for it to take a full day. If you don’t want to rent a car, there are several tour companies that offer Golden Circle tours.
Cross the Northern Lights off of your bucket list
Visitors hoping to see the Northern Lights, or aurora borealis, in Iceland are spoiled for choice. The country’s wide-open skies, long dark nights, and often optimal viewing conditions make it one of the world’s best places to see this magical dancing light show. The best time to visit Iceland for the Northern Lights is from September - March, with October and February being ideal.
Walk along the black sand beach
Reynisfjara Black Sand Beach is one of Iceland’s most stunning attractions. In fact, the beach is so stunningly beautiful that it’s been voted as one of the world’s best beaches, despite not exactly being a great place to catch a tan.
Take a walk along the shoreline as the ocean waves roll onto the pitch-black sand beach, set against towering basalt formations and get a feel for what makes Iceland's dramatic landscapes so special. Reynisfjara is truly a must-visit.
Where to stay on a budget in Iceland
Campsites in Iceland
Camping in Iceland is the best of both worlds. It provides you with an up close look at the magnificent landscapes you likely came to see and it’s a whole lot cheaper than a hotel room. There are more than 170 camping sites all over Iceland, ranging in price from $15-$30. Fortunately, most campsites don’t even require advanced reservations.
If you’ll be camping a lot during your trip, you may want to consider getting a Camping Card for €159. The card is valid for 28 nights and gives you overnight stays in any of the 30+ participating campsites.
Don’t want to pack your own camping gear? No problem. You can rent everything from boots to tents at Iceland Camping Equipment Rental in Reykjavik.
Hostels in Reykjavik
Whether you’re basing yourself in Reykjavik or just staying the night, you’ll have plenty of hostel options to choose from.
Kex Hostel (the Icelandic word for biscuit) is arguably the country’s most popular hostel. With an onsite gastropub, vintage barbershop, and boxing gym, it’s certainly not your usual hole-in-the-wall backpacker spot.
Situated above Reykjavik Terminal transport hub, Bus Hostel is another popular place to stay on a budget in Reykjavik. It’s not the flashiest hostel on the scene, but it’s clean, spacious, modern, and most importantly, affordable.
Fossatun Camping Pods
Fossatun's camping pods are a great, unique option for budget travelers who aren’t ready for truly down and dirty camping. Instead, you can think of it as more like glamping.
Situated away from the city, these camping pods let you connect with Iceland’s nature while still retaining your usual creature comforts. Just be aware that Fossatun’s camping pods are a sleeping bag accommodation, meaning that most people bring their own sleeping bags. However, they do offer a bed linen package of a duvet, pillow, sheets, and a towel for rent.
Cheap flights to Iceland
Recently, Dollar Flight Club members have saved between 70-90% on cheap flights to Iceland. On average, our members spent $485 on their tickets and saved over $300 per ticket. Here are a few samples of cheap flight deals that Dollar Flight Club members have received recently.
New York City (JFK) to Reykjavik (KEF)
Price with Dollar Flight Club: $227
Average Price: $375
Boston (BOS) to Reykjavik (KEF)
Price with Dollar Flight Club: $255
Average Price: $397
Los Angeles (LAX) to Reykjavik (KEF)
Price with Dollar Flight Club: $531
Average Price: $800
Where to find cheap eats in Iceland
Because you’re visiting Iceland on a budget, it’s no secret that your best bet is cooking your own meals whenever possible. Whether that means getting a simple camping stove for your trip around the Ring Road, renting an Airbnb with a kitchenette, or booking a spot that includes breakfast so that you’re covered for at least one meal each day.
If you will be able to do your own cooking, you better get to know Bónus, the no-frills Icelandic supermarket chain that’s also a budget traveler’s best friend. They have 31 locations around the country and are the perfect place to stock up on all of your essential groceries for your trip.
If you’re looking for (relatively) cheap eats in Reykjavik, do as the locals do and take advantage of the affordable hot dog stands throughout the city, where you can grab a dog for just $2-$4. If you didn’t know, Icelanders take their hot dogs very seriously, as the line outside Bæjarins Beztu Pylsur will tell you, so you’re in good hands.
Other Budget-friendly restaurants in Reykjavik
Packing for Iceland: The essentials
Iceland’s unique climate and dramatic landscapes mean that you’ll need the right gear to make the most of your trip. Here are some essentials that I was glad to have when I visited Iceland.
A warm hat
My travel partner and I each snagged one of these affordable knit hats (in different colors) for our visit. They were warm, comfortable, and still looked great in pictures.
Even in the summer, you can always expect rain in Iceland. Having a water-resistant jacket is essential not just for rainy days, but for when you’re getting up close and personal with some of the waterfalls. I used this simple softshell from REI which is water-resistant and makes for easy layering. My partner was extremely happy with her North Face Venture 2.
Visiting in the summer meant we didn’t need bulky or expensive gloves on our trip. These touch screen thermal gloves were enough to keep us warm on chilly days while still allowing us to use our phones.
This is a must-have during the summer months when the sun literally never goes down in Iceland. This contoured cup sleep mask is insanely comfortable and completely blocks out light.
Start planning your trip to Iceland
While it certainly isn't the cheapest place to visit, it's still possible to plan an incredible, memorable trip to Iceland on a budget.
BY: ZACH ANDERSON, CONTENT MARKETING & FLIGHT EXPERT
Zach is a digital marketer, copywriter, and flight deal expert at Dollar Flight Club where he helps 1 million people travel more. As a digital nomad, he is deeply passionate about location independence, Thai food, and helping others see the world affordably.