Iceland: Budget Tips

Iceland is a fairly expensive country, and even with a lot of planning we still went over our budget. We had a modest limit to what we wanted to spend, and had days where we splurged and other days where we tried not to spend anything. Here are some tips on ways to save for your trip!

For most trips I try to think of the maximum cost I’d be okay spending, and then work backwards. Our trips usually fall into: super tight budget, budget friendly, and comfortable. This trip was budget friendly, we saved up ahead of time, figured out what we wanted to spend and worked backwards from there. We splurged every now and then, and generally had no regrets on this trip!

Picking when you go can also have a major affect on the cost. We chose to go in the shoulder season, early May, and had a great time. Peak summer travel will be more expensive for hotels, car rentals, and a lot busier. May worked out perfectly for our schedule and we had a somewhat easier time booking things in advance. 


We did not have flexible dates in choosing our flights, which caused us to spend more than we liked (around $2000 minus a Delta gift card). We flew with Delta from Atlanta to JFK to Reykjavik. We figured ahead of time this would be the bulk of our expenses, and not much wiggle room with our budget. 

If you have flexible dates you can search for airfare sales, or deals and pick a better option than we did. Google Flights, and Skyscanner are good options in searching entire months for airfare deals. 

Our trip didn’t have much flexibility or we would have tried flying with WOW Airlines. While they do not fly out of Atlanta, they do fly from select cities across the US and offer discounted airfare to Iceland and the rest of Europe. This is a great affordable option, and if they do not fly out of an airport near you, Southwest Airlines overlaps with a few of WOW’s departure airports (Newark, Boston, Los Angeles, Washington DC, etc). Check out their Route map and see if theres an option near you!

Car Rental:

Since we were road tripping around the entire country, we rented a car the first day we landed from the airport. We used Cars Iceland and had a great experience with them. Their customer service was great, our car was equipped with GPS and the size fit our needs. 

We ended up paying around $1300 for 11 days. This included the GPS, insurance for 2 drivers, collision/damage insurance, gravel protection (get this regardless of the company you use), and theft protection. Most of these were already included in the price, however, Iceland is extremely safe and the theft protection isn’t necessary. 

There are a few ways to save money on car rentals depending on your needs:

Manual vs. Automatic: We don’t know how to drive a stick, and therefore had to pay more for an automatic. The majority of car rental companies in Iceland have a select number of automatics and you should reserve one ahead of time!

Size of Vehicle: Knowing what you’ll be doing on your trip will determine what type of car you’ll need. We had a 4x4 vehicle because we knew we’d be traveling via dirt/gravel roads at multiple points in our trip. You’ll also need one if you plan to use F-Roads or explore the Fjords. If you’re sticking to Route 1 then you can get by without a 4x4. There were a lot of smaller cheaper cars and you can definitely find an affordable option for your trip. 

Other Ideas: Throughout our trip we saw bus tours, hitchhikers, and cyclists traveling around the country. We enjoyed the freedom of driving ourselves and as a photographer did not want to be stuck to a group itinerary. However, if the idea of driving over mountains or dealing with snowy weather scares you then a bus tour might be good. We saw multiple companies offering rides through different regions or the entire route with stops at major attractions. As someone who has never hitchhiked I can’t say I’d recommend this option, but Iceland is a very safe country and with more research might be a viable way to save money. 

Gas: Please remember gas is very expensive in Iceland. We paid roughly $385 during our entire trip, averaging $30-$60 each time we filled up. 


This is where you can really save a lot of money, or splurge on a nice hotel depending on your budget. We lean somewhere in-between on our trips and like to mix it up. We ended up spending around $1300 for 2 people for 12 nights. 

Ways to save:

Hotel/Hostel/Camp/Couch: For our trip we stuck to hostels and hotels. We had planned on only doing a nice hotel halfway and at the end of our trip but the hostels we wanted to book had already filled up. Decide on what you’d be comfortable with because there are a lot of options in Iceland!

One of our go to budget friendly options is Hostelling International. We’ve used them a few times in the U.S. and they have locations all around Iceland. Make sure to read the reviews before booking, and book in advance as well since they’ll fill up fast during peak season. The great thing about HI hostels is the flexible options. You can have a private room/private bath, shared bath, small dormitory style, or larger dormitory style. We’ve never tried the dorm style and usually stick to the private rooms, but for $30 a night it’s tempting! On a side note you’ll need a HI membership, or pay extra if you do not. 

Camper vans are another option we did not explore, which would probably increase your transportation cost but combine with your accommodation expenses. We saw people camping near waterfalls but are unsure of the costs for campsites. One important rule to Iceland is you are not allowed to go off-road and camp wherever you like. It’s against the law and will result in hefty fines. Keep Iceland beautiful and don’t be that person!

Couch surfing seemed like another viable option and there may be a large enough Icelandic community to do this, but we’ve never really considered this option. 

You can find a more in depth review of all the places we stayed at here:  Accommodation


Food in Iceland is very expensive and it’s also delicious. The majority of Iceland’s food has to be imported which makes even basic meals expensive. We tried balancing our meals a few different ways throughout our trip.

Grocery Shopping: Do this before you leave Reykjavik! The majority of larger grocery stores do not exist outside bigger cities. Gas stations carry some food choices, but it’s better to stock up before hand. We made almost all of our lunches in the car which saved us money, and time because fast food is almost non-existent. It is very remote between towns and you can go hours without seeing a place to eat.

Hostel Kitchens: Almost all of Hostelling International’s have a kitchen for guests to use. The only rules are usually cleaning up after yourself, and they’re fully stocked with appliances and cookware. This came in handy after long legs of our trip when we were too exhausted to venture out to find food. 

Hotel Breakfast: The majority of hotels we stayed at (and hostels) included a free breakfast or for a small price. We took advantage and loaded up on what we could to hold us over for awhile. Most places were worth it, but Icelandic Skyr from gas stations is also a delicious second option. 

Nice Meals: You should definitely splurge every now and then on good meals. Iceland has delicious seafood restaurants all over the country. You’ll get a better cultural experience if you indulge in a few expensive meals along the way. We easily had some of the best meals of our lives in Iceland!

You can see all the places we ate at here: Iceland Food Part 1 & Part 2 

The Extras:

There are going to be some extra things you’ll need to account for when budgeting for Iceland besides the previous categories. Good news is there are a free things you can do!

A lot of waterfalls, mountain trails, and parks were all free. We never had to pay for parking, and only encountered an entrance fee for one crater on our entire trip. 

There were a few things we bought tickets for such as the Blue Lagoon (which you should book in advance), the Jokulsarlon Glacier Lagoon boat tour, museum entrance fees, Cave Vatnshellir tour in the Snaefellsjoekull National Park, and an ATV tour near the glaciers. If you plan to get souvenirs most of these places sold trinkets, but the airport is a great place to get everything Icelandic tax free. This is especially true for the Blue Lagoon, there is an entire store in the airport selling all of their best-selling products.

Check out the Packing Tips Post to determine what type of gear you may need to purchase for Iceland. 

Iceland may seem out of reach at first, but the best experiences we had were free. We’re eager to plan a second trip back for the northern lights! 

Using Format