The Ultimate Guide to Experiencing Iceland on a Budget

Iceland is without a doubt one of the most beautiful countries I have ever visited. I always wanted to travel there but could never bring myself to spend that much money to visit a country that felt so close to home. I always thought that if I had enough money to visit Iceland for a week, I’d rather travel to Asia for 3–4 weeks instead. It didn’t help that so many travel bloggers writing about travelling through Iceland on a budget seemed to have had a completely different budget than I did. This year, I finally took the leap and had an amazing time. I ended up spending 4–5 days and 4 nights there and only spent €400 in total (including flights).

Now that I’ve been, I am glad to say that it is possible to properly experience much of what Iceland has to offer without having to reach too deeply in your pockets. Here is my ultimate guide to fully experiencing Iceland on a budget. If you want to know more about the route I took and the sights that I loved most, skip to point 6.

1. Go in the Low Season

The difference between the high and low season in Iceland is huge. The high season starts at the beginning of June and goes until the end of August. Everything is a lot more expensive during these summer months, especially flights, car rental and accommodation so avoid them if you’re looking to experience Iceland on a budget. We travelled to Iceland in the last 5 days of the low season (27th-31st of May) and we found out that our car rental and flights would have been 3 times as much if we had planned to return on June 1st instead of May 31st. Things also get more expensive during the peak winter months as people form around the world travel to Iceland to experience the Northern Lights.

The end of May is a great time to travel to Iceland. It’s early enough in the year for all the snow and ice to still be intact on the glaciers and mountains, but it’s already close enough to summer for all the beautiful green nature to blossom. Whilst you might not quite be able to enjoy the northern lights or midnight sun, if you’re lucky with the weather, you can get the best of both seasons.

2. Go When the Days are Longer

There is no way around it: Iceland is an expensive country. One of the great things about travelling to cheap countries is that your main expense is flights, so you can easily stay a few extra days without having to spend much more. That is not the case in Iceland. Every extra day in Iceland means spending a lot of money on food, accommodation and transportation.

The solution? Go for fewer days, but when the days are longer. I had a clear idea of all the things that I wanted to do and see whilst in Iceland and I knew how much time I needed to see them. Winters in Iceland can be rough and there are very few hours of proper daylight, meaning that you cannot visit much during the day. One of the best things about going in thelate spring and summer months is that the days are really long, with the sun not setting until around midnight and rising again just 3 hours later. This meant that we could easily get up in the morning and spend all day exploring. The most stunning sights in Iceland are in nature and are all freely accessible with no opening or closing times. It feels pretty surreal hiking in mountains at 9 PM in broad daylight.

Another great thing about travelling when the days are long is that everything is way less crowded. We spent 5 days road tripping and we had a lot of the most amazing sights to ourselves. When the days are shorter, all the tourists have to visit the sights at the same time, making them super crowded.

3. Rent a Car and Do a Road Trip

If you go to Iceland, you have to rent a car! When we first started planning our mini-trip we actually considered using Reykjavik as our base and just bussing to the different sights. I am so glad we decided to rent a car in the end. Iceland practically only has one real road that goes around the whole country and it is one of the most amazing places to roadtrip. The feeling of driving in the middle of nowhere, on a long straight road, constantly surrounded by stunning nature is something else; I often still think back to the overwhelming sense of freedom I felt exploring this stunning country by car.

All of the major sights are accessible by car and the roads are great. One of the best things about Iceland is that it has so much to offer. Some of the most amazing stuff is off the beaten track and having a car gives you the freedom to see everything and anything you want.

Sad Cars is by far the cheapest car rental service and they were great. A guy picked us up at the airport and drove us straight to the car rental place. Soon afterwards we had our car with no hassle and very little paperwork. Icelandic roads are great and there are very few cars on the road so you only need a very basic car with basic insurance. None of the extras are necessary, especially the GPS (Iceland must be the easiest place to navigate in the world and that’s coming from me; the person with the world’s worst sense of direction). We paid €130 for the 5 days, meaning we spent about €13 a day each. Compare that with the buses from Reykjavik, which cost around €40 for a return trip to a single site. Just keep in mind that car rental prices skyrocket during the summer months!

Petrol isn’t cheap, but if you rent a low-consuming car, you won’t spend much.

4. Pack Some Food

Food and drinks are extremely pricey in Iceland, especially outside the capital. If you’re careful and ask locals, you can find places that aren’t particularly expensive. These places are usually fastfood joints such as the noodle bar in Reykjavik, the KFC in Selfoss, and cantine by the side of Vik’s Beach.

The main expense when it comes to food is snacks. Once you leave Reykjavik, you won’t see many supermarkets that aren’t also a petrol station. Some basic snacks can be ridiculiusly expensive (we saw a packet of normal cheese priced at €12!) so we decided to bring a bunch from home. We packed all sorts of cookies, crackers and sweets and basically lived off those during the day. Bringing snacks from home can save you a lot of money, especially if you are roadtripping.

5. Stay at Cheap Hostels or Sleep at Camp-Sites

If the weather allows it, camping is definitely the cheapest form of accommodation if you’re travelling around Iceland on a budget. There are plenty of camp sites throughout the country and they usually have plenty of facilities and only charge €12–20 per night.

We decided to opt for the more comfortable option and booked some relatively cheap hostels and guest houses. We found the cheapest accommodations across the country and planned our route accordingly. In total, we spent €100 each on accommodation with our rooms always costing under €50 for the night.

We spent our first night at the Hi Hostel in Laugarvatn, followed by Hotel Hella in Hella, the charming Vestur Hus in Hof and finally, the Fit Hostel in Keflavik for a short night’s sleep before our flight from Keflavik Airport.

6. Take Advantage of the Nature, it’s Free! (Our Route)

The main reason I wanted to go to Iceland was for the nature. We spent a few hours in Reykjavik on our last day, but as charming as it was, we wanted to spend the little time we had discovering all of Iceland’s natural wonders. For the same reason, we didn’t go to the Blue Lagoon. The idea of spending €40 to swim in a manmade lagoon didn’t appeal to me, especially given that there are so many more amazing and free natural lagoons and springs across the country.

The most amazing sights were all free. On our first day, we went straight from the car rental place to see the amazing Gullfoss waterfall. We then went to see the famous Geysirs, which was also very cool, and then headed to our hostel in Laugarvatn.

On the second day, we visited Þingvellir (Thingvellir) National Park in the morning and hiked up the mountain near Hveragerði to swim in the hot springs, after which we spent the night in Hella. Þingvellir was amazing, but the hot springs near Hveragerði were even better, especially because they are off the beaten track. Again, both are totally free to visit. The hot springs require a good couple of hours of hiking (you can find directions online or ask locals, you won’t be the only one going there) but are well worth it.

Our third day was by far the most packed day, but it was also the most impressive. We started by checking out the famous Skogafoss waterfall, which was amazing. Right before Skogafoss, there is another great waterfall called Seljalandsfoss. We stumbled upon it by accident but are glad we did because it’s an impressive waterfall and you can actually walk behind it. After Skogafoss, we drove on to discover the black sand beaches near vik, which was awesome. After a couple of hours on Vik Beach, we drove on to find the famous crashed Sólheimasandur DC-3 Plane. The DC-3 plane was definitely one of the highlights. Getting there involves parking by the side of the road and walking for a good 1.5–2 hours (4km), but it’s totally worth it. Seeing the old abandoned plane in the middle of black sand near the ocean was a surreal experience. You can find directions to the plane here.

After getting back from our trek to the plane, we hit the road again and made our way to see the famous Jökulsárlón Glacier Lagoon on the very southeast of the country. On our way to the Glacier Lagoon, we stumbled upon a smaller glacier lagoon called Fjallsárlón. The famous Glacier Lagoon was stunning, but Fjallsárlón lagoon was also a sight for sore eyes . The best part about Fjallsárlón was that we were the only people there and had the whole lagoon to ourselves. After the lagoons, we even drove to Vatnajökull National Park and hiked to the Skaftafell waterfall. The area around Skaftafell was nice, but the waterfall was somewhat underwhelming compared to the other ones we had seen. I really think that Skaftafell is most worth it if you have the time, gear and money to check out the famous ice caves, which we unfortunately didn’t. After a long and exciting day we headed back to Hof for the night.

On our last day, we drove 4 hours from Hof to Reykjavik. Icelands capital is nice, but there wasn’t too much going on. We walked around the city for a couple hours and decided that we wanted to get a last dose of nature before the end of our trip. We had gotten an insider-tip that we should go and check out Glymur, Iceland’s highest waterfall, north of the capital. The drive to Glymur was stunning as you drive alongside the beautiful fjords of Iceland’s west coast. We stopped multiple times on our way to soak in the views. Glymur is definitely off the beaten track and the climb to reach it is longer and a bit tougher than the other treks and hikes we had done. It’s definitely worth it and once again, we were practically the only people there. After Glymur, we drove back to Keflavik for a few hours of sleep before our morning flight.

Those are all the amazing sights that we managed to pack into our 4 days on the road and we didn’t have to pay for a single one of them (though apparently, the Geysir has an entry fee during the high season). Having a car allowed us to see some great remote places and it was often these non-famous sights that were most impressive (Hveragerði hotsprings, Fjallsárlón lagoon, Glymur).

7. Travel with Someone

Iceland might just be the most beautiful country I have ever visited and I’m glad I had someone to share the experience with. There are so many stunning and humbling things to see and I think you really get the most out of it when you are with other people who appreciate it as much as you do. Also, if you want to travel to Iceland for as cheap as possible, I recommend you travel with someone to cut the costs of car rental and accommdation in half.

Despite being one of the world’s most expensive countries, you can still fully experience Iceland on a budget. Hopefully you will find this information useful while planning your own trip. You can find pictures of my trip on Facebook and Instagram. If you want any tips for travelling in Iceland, feel free to get in touch!