Iceland On A Budget: 8 Tips To Explore Iceland Without Breaking The Bank

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Iceland’s otherworldly landscape will leave you awestruck and inspired. From the moment you step off of the plane, you’ll feel as if you had just landed on the moon. Just looking out the plane window at the celestial landscape below may even make you forget that you’re arriving to the world’s fifth most expensive country. Despite Iceland’s growing popularity as a travel destination, many people assume the land of ice and fire is far out of their budget. But they are wrong. Yes, Iceland can be incredibly expensive, but any savvy budget traveler will let you know that there are many ways to get around Iceland’s pricey prestige and still have a once in a lifetime travel experience.

8 Tips To Explore Iceland Without Breaking The Bank

1. Scale your trip goals

Iceland might be a small country, but it often seems like there is an endless number of sites to see and things to do. Setting realistic trip goals and expectations that reflect your budget is the first step to making the most out of your Icelandic experience. If you can only afford to rent a car for 2-3 days, don’t try to tackle the famous Ring Road and spend your entire vacation driving. Check out Iceland’s smaller loop, The Golden Circle, home to some of Iceland’s most breathtaking natural wonders.

2. Hit the trail, not the tour bus

The great thing about traveling to hike is that you usually don’t have to pay for it. All you need to have the time of your life in Iceland is your hiking boots and day pack. Iceland is home to some of the best trekking around. From seaside hikes in alpine reminiscent forests to grassy highland adventures, and even waterfall adjacent climbs. There are a number of trails with astonishing views within reach from the capital city of Reykjavik. We love the Glymur Waterfall hike, the many trails of Mt. Esja, and the Laugahraun Lava Field Hike.  Be sure you know where the trail heads begin, they are tough to find without GPS.

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3. Hot dogs, hot dogs, hot dogs

In 2004, former US President Bill Clinton went to Reykjavik for the UNICEF conference. While in the Icelandic capital, he paid a visit to the Bæjarins Beztu Pylsur Hot Dog Stand. Since then, Iceland hot dogs have been renowned worldwide. Bizarre moments in hot dog history aside, if you’re in Iceland and you’re on a budget, you should most definitely eat the hot dogs. Restaurants in Iceland are far from cheap, and hot dogs offer an easy solution to those looking for some midday nourishment while out and about.

See 7 more ways to save money on food in Iceland. 

4. Hostels are your friend

There’s a large selection of hostels all over Iceland, and for the most part, they are of the highest quality. Hostels are a great way to keep your lodging expenses at a minimum while ensuring a prime location. Some hostels even offer free tours and activities.

5. Don’t splurge often, but when you do make it count

Tours can really break the bank, but sometimes there are things you simply cannot do on your own. Take ice climbing for example. Unless you’re a seasoned alpinist who happened to pack their own crampons, you’re going to need to use an outfitter. If you’re trying to save money, cut down on the number of tours and guided activities, but when you absolutely must do one, make sure it’s one you’ll always remember.

6. Hydrate with tap water

If you’re sipping on $10 bottled water while complaining about spending too much money, something is wrong. Lucky for you, Iceland has some of the cleanest water in the world. Not only can you drink straight from the tap, but you can also fill up your reusable bottles in many of the streams!

7. Say no to those extra drinks

At about an average of $10 per drink, nights out in Reykjavik can really break the bank. If you have to drink, go to the store and pick up your own supply to save a few bucks. But one of the best ways to save in Iceland is to go alcohol-free.

8. Skip the Instagram worthy Blue Lagoon in favor of a free, less crowded option

We’ve all seen pictures of the Blue Lagoon on Instagram. In fact, we’ve seen so many that we may not even want to see yours. Escape the crowds and the hefty price tags by visiting one of Iceland’s many other cheap or free natural hot springs. We love Landbrotalaug, located about 2 hours north of Reykjavik.

Armed with the tools to plan and budget, there is now nothing stopping you from purchasing that ticket to Iceland!

Read More On Iceland at Trail to Peak:

A Complete Guide To Iceland’s Ring Road
The Ring Road Video: An Adventure in Iceland
7 Ways To Eat On The Cheap And Save Money In Iceland
The Ultimate Guide To Renting A Car For Iceland’s Ring Road
A Driving Guide For The Snaefellsnes Peninsula
A Guide To Driving North Iceland
A Guide To Driving Southeast Iceland
A Guide To Driving Iceland’s Golden Circle
A Guide To The Blue Lagoon
A Self Guided Walking Tour Of Reykjavík
40 Photos That Will Make You Want To Explore Iceland’s Ring Road

Morgan Bernard

Morgan Bernard is a writer, photographer, and travel business owner based out of Houston, Texas. Travel is the focus of his life, his business, and therefore his writing. Morgan’s work has appeared in various travel and surf specific publications. He has also worked as a contributing writer for the Buzz Magazines in Houston. When he’s not writing, Morgan co-owns and operates the student travel business, Knowledge on the Run.

Would you like to contribute to Trail to Peak? You can submit your ideas using our contact page.


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