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Iceland Is The Most Stunning Country We Have Been To, But Also The Most Expensive One. It Has The Fifth Highest Cost Of Living In The World, But That Shouldn’t Stop You From Visiting Such An Incredible Country. After 2 Weeks Of Exploring The Country, We Can Tell You Iceland Can Be Done Without Breaking The Bank.

Here Are 13 Tips On How To Do Iceland On A Budget

1) Stay In Airbnb’s In Reykjavik

We love staying in Airbnb. In our experience, Airbnb’s cost is always 20 to 30% cheaper than staying in a hotel/hostel without compromising on the quality.

In Reykjavik, we stayed in Airbnb at $30/person/day.

2) Camp

It is easy to find Airbnb in Reykjavik, but it will be impossible to find it while driving in the highlands or even the Ring Road for that matter. Camping is available everywhere in Iceland for as low as $10/ night. Camping is way cheaper than a hostel too because in a remote location even a mixed dorm will cost you $50/ person. Moreover, if you want to save more money you can camp anywhere in the wild and not pay any fees. As long as, it doesn’t say “camping not allowed”, it is completely legal.

3) Drink Tap Or River Water

Water in Iceland is incredibly clean and drinkable. We highly recommend you to carry a water bottle and fill it on the go.

4) Cook Your Own Food

Food is another thing that is very expensive in Iceland. Eating out even on a budget can cost you a minimum of $15. It’s easy for your food cost to go through the roof at those prices.

The best thing to save money is to buy groceries and cook your own food. All guesthouses, hostels, campsites in Iceland have got a kitchen.

5) Hire A Camper

The major benefit of renting a camper is that it covers not only your transportation but also your accommodation. Not only that you can pretty much pull over anywhere and sleep that gives you maximum time to explore Iceland’s incredible panoramas. 

6) Hitchhike

Iceland is one of the safest countries to hitchhike. It’s easier to hike around in Southern Iceland than less populated Northern Iceland, although it is not impossible either. Instead of standing on the road to hitch a ride, better chances are if you ask in the hostel, guesthouse, or campsite. Most people will be driving on the main road. If you are a solo traveler, hitchhiking is a good option to save money.

7) Share A Rental Car

If you are traveling in a group, the best way to travel on a budget is to rent a car and share the cost. It will cost you an average of $ 70/day. Split that cost if it’s four of you and it wouldn’t be hard on the pocket. It gives you the flexibility to stop anywhere on the road unlike hitchhiking or a group tour. Driving is the best way to explore Iceland’s beauty.

8) Do Free Activities

  • Blue Lagoon $80
  • Glacier Hiking $300 
  • Ice Cave Tour $300 
  • Silfra Diving $ 450 
  • Horse Riding $300

Yes, tours in Iceland are as expensive as accommodation and food.

But there are tons of attractions that are stunning and free of cost like Jökulsárlón Lagoon, Seljalandsfoss Waterfall, Thórsmörk Valley, Geysir, Skaftafell National Park, and so on.

If you don’t want to spend $80 in the Blue Lagoon, here is the list of hot springs that are absolutely free of cost.

Top 5 Hot Springs To Visit In Iceland For Free

Iceland Is Known To Be The Land Of Ice And Fire. Located In The Hot Spot Of Earth, Iceland Is The Center Of Geothermal Activity. And At The Same Time, Iceland Is Covered With Glaciers Which Spread For Miles. This Mixture Of Geothermal Activity, Glaciers And Volcanoes (Ice And Fire) Has Created So Many Geysers And Hot Springs Stretching Out All Over The Country.  

There are a lot of very famous hot springs like Blue Lagoon and Secret Lagoon near Reykjavik. But in case you are traveling to Iceland on a budget and don’t want to spend 80 USD for a hot spring experience, here is our guide on Top 5 Natural Hot Springs Around Iceland which are not only free of cost but gorgeous too.

Reykjadalur means “Steam Valley” and this place definitely holds up to its name. If you ever wanted to soak in a natural hot spring in the middle of the mountains, then this is the place for you.  And it’s not only the hot spring that is spectacular, but a 3 km hike that leads to this natural marvel is also full of bright turquoise water, green valleys, and geothermal hot spots. It is located just an hour’s drive from Reykjavik.

If you love caves and you love hot springs, this is the place for you. Grjótagjá is a lava cave near Lake Myvatn and inside the cave, you can find an irresistible hot spring. During summer, the water temperature could get very high, so it is not recommended to take a dip. However during winter, just jump in and enjoy the bath. Game of Thrones famous scene was shot here where Jon Snow and Ygritte got “very close” for the first time. 

Landmannalaugar (Land-man-pools) is one of the areas famous for its colorful scenery. It is certainly one of the jewels in Iceland’s crown – full of beautiful hiking trails, stunning untouched natural beauty, colored dramatic hills, and bubbling sulfur springs. It is a hiker’s paradise and it is priceless to have an opportunity to relax in the geothermal natural hot spring after a strenuous hike. The pool is that is located next to the campsite and is pretty warm during the summer making it a perfect way to end a day. Important to note that you can reach Landmannalaugar only with a 4×4 car, as you have to drive on gravel roads and even cross rivers. 

Located in the south of Iceland, this is one of the oldest swimming pools in Iceland. It is filled with hot spring water which trickles down from the infamous Eyjafjallajokull volcano. It isn’t a natural hot spring but a man-made pool.  Surrounded by breathtaking mountain views, it is also known as Iceland’s best-kept secret. This pool is just a couple of hour’s drive from Reykjavik, located right before Skogafoss. Water temperature is perfect to enjoy the swim while enjoying the awe-inspiring scenery.

Viti is a volcanic crater hot spring, located on the northeast shore of Oskjuvatn. Water temperature varies between 25°C to 60°C and the bottom of the crater is quite muddy. Viti (meaning hell) is considered to be a dangerous place because some mud areas are very hot and there is also much sulfur in the water. Nevertheless, Viti is also one of the most magnificent and breathtaking hot springs in Iceland and whoever stands on the edge of this crater gets awestruck looking at this natural marvel.

Again, you will need a 4×4 car to reach this place.

9) Shop From Budget Supermarkets Like Bonus, Kronan

Small supermarkets could get quite expensive (like a pack of Doritos $8, a cold sandwich $12). That’s why we would highly recommend you to stock up whenever you find a big supermarket chain like Bonus and Kronan around you.

10) Eat The Hot-Dogs

If you are cannot cook your own food and you are done eating salads, fruits, and bars, another option for cheap eats is trying the famous Icelandic hot dogs topped with mustard, ketchup, and onions, which cost under $3 at any petrol station.

11) Bring Your Own Bed Sheet And Sleeping Bag

Like many Scandinavian countries, many hostels in Iceland charge $10 for bed sheets and comforter. If possible try bringing in your own sleeping bag or bedsheet. We were carrying our sleeping bags and it helped us save quite a lot of money.

12) Book In Advance

Be it renting a car, buying car insurance, or getting a tour, try to book most of the things in advance. Turning up in Iceland without pre-booking is likely to cost you an arm and a leg. To give you an example, we bought car insurance for $10/ day by booking it online in advance. Our car rental company was selling insurance at $40 /day. So we highly recommend you to book in advance. It will not only save you money but also time.