Reykjavik and Iceland On A Budget
Iceland On A Budget- 18 Tips
Iceland is one of my favorite places I have ever visited. But there is no denying it’s an expensive destination. After visiting in 2018, I returned for a month in 2022 hosting two sold-out group trips.
After spending so much time traveling around the land of fire and ice, I’ve learned a thing or two about traveling on a budget here.
Check out my video recap with all my budget tips:
1. Not a budget destination
When deciding on a destination for your trip, it’s important to consider if it’s a country you can afford to travel or not.
Iceland is ranked 3rd most expensive country in the world.
Traveling in the shoulder season may make your trip more affordable. But traveling in the summer means it would be warm enough for camping. It depends what kind of trip you want to do around Iceland!
2. Use Airport Direct
A taxi which can be over $170 USD into town.
It will take slightly longer but Airport Direct will save you a TON of money upon your arrival to Reykjavik.
- 45 min to town
- 2,990 ISK or about $23 USD
- Free Wifi & charging ports onboard
3. Alcohol is super expensive in Iceland. Shop at duty free.
Taxes on alcohol are insanely high in Iceland. If you know you want to have some drinks during your trip, the cheapest place to buy alcohol is at duty free right when you are leaving the airport just before baggage claim!
4. Hostels make for cheaper accommodation- check out Galaxy Pod Hostel
Hotels in Iceland come at a steep price, especially during peak season. But hostels are a great option if you are on a budget.
I have personally stayed at Galaxy Pod Hostel in Reykjavik and really loved it. It was just a short walk from downtown and far cheaper than anything
5. Save your money for excursions
If you’re on a budget, try to save your money for experiences! If you have to cut corners somewhere, I’d suggest budgeting less for food/accommodation.
My favorite booked experiences:
- Snorkeling between two continents at the Silfra Fissure with Troll Expeditions
- Glacier Hiking & Ice Cave
- The Reykjavik Food Walk
- Horseback Riding with Wake Up Reykjavik *discount code: wanderlust
For even more money off with Wake Up Reykjavik, use discount code: wanderlust
6. Book accommodation in advance
Hotels in Iceland are expensive and will fill up during peak season.
Book as far in advance as possible. Prices jump the closer you get to your travel date.
7. Download the free Aurora app
Northern Lights tours tend to cost about $80-$100 depending on the tour provider you use.
And while these tours can really be worth the money, you can also try to track and chase the lights yourself by downloading the free app.
8. Buy groceries
Food in Iceland is very expensive since so much of it is imported.
If you’re visiting in the summer, pack sack lunches and plan to have a picnic! There is no shortage of scenic viewpoints to sit and eat your lunch.
Going out for dinner could easily cost you $40-$60 so if you’re on a tight budget, plan to cook at your hostel, in your campervan or at your campsite.
9. Icelandic hot dogs are famous and make for one of the cheapest eats.
Restaurants in Reykjavik aren’t cheap but this little hot dog stand is quite famous and makes for an inexpensive meal on the go!
The hot dogs at this iconic stand are actually made primarily with lamb, a staple in Icelandic cuisine. The correct way to order is to walk up to the counter and say “I’ll have one with everything!”
10. Join the free walking tour with City Walk in Reykjavik
This is one of the best walking tours I have ever been on. Iceland has a fascinating culture and the tour is incredibly interesting. Just be sure to tip your guide.
11. Avoid taking a taxi if possible
Stay somewhere central in Reykjavik and walk. Taxis are super expensive and can be difficult to come by in Reykjavik. It’s a very walkable city, even when the weather is bad because there are pipes running under the sidewalks with hot geothermal water so it melts the snow and ice.
12. Drink tap water, it’s clean and delicious! Skip buying bottled water.
The tap water in Iceland is some of the best in the world! Do yourself a favor and drink directly from the tap. Bring a refillable water bottle. Better for the wallet and the environment!
13. Public transit is an option when visiting places like the Sky Lagoon
While walking is typically the best way to get around Reykjavik, you may want to take a bus if you plan to visit some places slightly further out like the Sky Lagoon.
Bus from central Reykjavík to Sky Lagoon
From Hlemmur square, take bus no. 4 and stop in Hamraborg (15 min). From there take bus no. 35 until you stop at Hafnarbraut (4 min), which is the nearest stop to Sky Lagoon.
Follow the signs and walk for a few minutes down Hafnarbraut until you reach Vesturvör.
Walk along the ocean and you will arrive before you know it.
14. Shop thrift stores for traditional Icelandic wool sweaters
Traditional Icelandic sweaters are a popular souvenir but come at a hefty price. They can fetch a price of $200-$400 easily since they are usually 100% wool, handmade and super high quality.
Thrift Store with Wool Sweaters: Fatamarkaðurinn Second Hand Market
Address: Laugavegur 126, 105 Reykjavík, Iceland
15. If you do plan to drink, take advantage of happy hour
Iceland loves a happy hour special! So if you do plan to do for drinks, schedule it during happy hour.
15. Pack wisely to avoid unnecessary purchases- crampons, rain gear, warm enough layers..
If you have to buy rain gear, snow boots or warm layers in Iceland, it will cost you a fortune. Make sure you have everything you need before arriving. Even in winter, you’ll want to make sure you’re prepared for rain. Waterproof gear is a must.
17. Seek out free things to do
You can easily create an itinerary that is full of free attractions:
- waterfalls
- beaches
- gardens
- public art installations
- churches
- monuments
- geysers
- lava fields and more!
18. Join a group tour to get discounted hotels, activities and split gas
In an expensive country like Iceland, you may actually save money by booking a group tour because it means discounted hotel prices, split gas and group discounts for activities.
You can see the highlights from my 2022 Iceland group trip here.
If you want to join for my future group trips to Iceland, stay tuned & check out my Travel with Me page!
Iceland On A Budget
