Iceland is open for travel: Volcanic eruption in Iceland 2024

Travel Iceland on a Budget

|July 2, 2017
Anthropologist, social media guru, Icelandic nature and food enthusiast.

Iceland is an expensive country, that’s a fact BUT there are budget friendly ways to go about visiting. Let me guide you through...

Panoramic view of Kirkjufell mountain and waterfall in Iceland

There are a few things that come cheap in Iceland so let’s start by easing in with those facts:

  • Drink the tap water – some cultures have embraced bottled water for their daily consumption, especially in Europe and North America. However, the tap water in Iceland is among the purest in the world (maybe the purest), so there is no need to worry about impurities or anything else that you might not like to find in your drinking water! Because of this, everyone drinks tap water in Iceland. You can buy a reusable bottle and stock up on tap water before every trip. You might even be able to refill at rivers if it’s clear you are good to go!

  • Swimming pools are under 1000 ISK – a visit to one of the numerous swimming pools Iceland has to offer is cheap and a great way to shower, especially if you are staying in a tent or a camper van.

  • Visit waterfalls it’s free – at this moment every single waterfall in Iceland can be visited without a charge. Make the most of it. Here is a list to help you: Top 10 most beautiful waterfalls in Iceland.

  • Take the bus in Reykjavik – it’s much cheaper and there is a very efficient app to help you try checking out it’s super helpful.

  • Hitchhike – This is the safest country in the world. Even solo travelers are hitchhiking a lot. Also, a good way to meet locals and get tips.

  • Buy alcohol the smart way – it’s true that bars in Iceland vary in price, from the affordable to the…less so. But there are ways to stretch that beer money. For a start, Icelandic off-licenses (AKA liquor stores) sell alcohol much cheaper than pubs and restaurants do. Even better: Buy the alcohol duty-free, either upon departure or arrival. (If possible, go for the latter – Icelandic beer is world-class.)

    BYO (or BYOB) restaurants are relatively rare in Iceland, and they don’t tend to advertise the fact. But locals and hostel staff can point you in the right direction.

    Also, there are local apps available to tell you when drink offers, happy hours and limited-time opportunities are available (usually in Reykjavik).

Icelandic beer

  • Eat casual – There are ways to enjoy Icelandic food without breaking the bank. Look into street food, casual food and hostels. Icelanders love their hot dogs, and if you’re in a city you’re never too far from one! Sandwiches are also quite plentiful, but not quite as cheap. In fact, we recently published a guide to cheap eats in Reykjavik to help get you started.

  • Take a hike – most mountains around Reykjavík are well marked and busy with locals all year round so this makes a great option. You can take the city bus to the roots of both Mt. Esja and Mt. Úlfarsfell.

  • Share the cost - whether you’re traveling alone or with a group, you might want to consider sharing some of the costs: A good example is car rental. Many of our tours are either self-driving or begin at a site that you get to yourself. And the financial difference between one person renting a jeep and four of you doing it is, as you might imagine, substantial.

  • Hit the flea market - it can be a good idea to check out the Flea Market in Reykjavik called Kolaportid these are where you can pick up bargains, often ones that you won’t find anywhere else. How does a cute souvenir sound? Or maybe a tasty street food snack? A flea market is the best place to pick up these kinds of things at low prices.
  • Make the most of our deals - make sure to browse through our 2023 vacation packages to ensure you're saving as much as possibe while exploring all there is to see in Iceland.

Budget-friendly grocery shopping in Iceland

This is where you will find the cheapest groceries.

Budget friendly grocery shopping mall in Iceland

Opening hours
Mondays – Thursdays: 11:00 to 18:30
Fridays: 10:00 to 19:30
Saturdays: 10:00 to 18:00
Sundays: 12:00 to 18:00

To find your nearest Bónus shop click here.

7 Icelandic Car Snacks or Food to buy at the grocery shops – Ideas!

When you travel to a new country its often super fun to visit a grocery store. The only thing is that with a new language and new things in the shelfes you often don’t know what to get, let alone if you are trying to keep your budget. Fear not, I am here to help. Here are my ultimate fav, go-to snacks when I am trying to save some money but need car snacks for an Icelandic road trip.

Skyr – the Icelandic yogurt, tastes amazing and usually comes in containers with spoons. Perfect for keeping in the car and is okay still when not super warm.

Sómi or Júmbó sandwiches – This family-owned company has been making sandwiches since 1978.

Kókómjólk – Chocolate milk from Iceland. Every local’s favorite.

Hleðsla – Protein milkshake comes in different flavors.

Flatkaka með hangikjöti – This literally means flat baked/cooked bread and hanging meat. This is a very original dish in Iceland. So buy flat bread, Icelandic butter, and hangikjöt. Spread the butter over the flatkaka and then put a slice of hangikjöt on top, close it with another flatkaka and you have yourself the most Icelandic snack EVER!

Kleinur – A bag of twisted doughnuts will go along the way on a road trip.

Traditional Icelandic twisted doughnuts

Harðfiskur – Dry fish, this is another Icelandic delicacy, best served with A LOT of butter. But be aware, this smells. Like a lot!

And for those who have a sweet tooth check out The Ultimate Guide to Icelandic Candy.

Where is the cheapest gas in Iceland?

Now that Iceland has Costco that’s where you will find the cheapest gas.
If you have a membership load up before leaving Reykjavík.

After that on the list is usually where there is only self-service. So the golden rule for buying gasoline for the best price around Iceland is going to the gas stations that don’t have any other service, no shop, no employees or anything.

This usually means:




Cheap accommodation in Iceland?

Hotels are usually expensive especially in summer so if you are looking to save a little money with accommodation these are your options:

Air BnB

A common, popular choice and they are available everywhere! Just try booking with notice.


If you are okay with sleeping on a random person’s coach do! This is the ultimate cheap option.

House swap

This option is getting to be very popular amongst Icelandic people. My sister does it all the time and loves it but again with this option, you need to start planning with a good notice.

Camper vans

A great idea when visiting Iceland in summer. You get 2 for 1, car and accommodation. Just be careful to park where it’s allowed!


Iceland has a wonderful camping culture, and if you do it right, it can slash accommodation costs.

This is something to consider even if you’ve never camped before: Icelandic campsites are among the best you will ever encounter, and many of them have excellent facilities (bathrooms, showers, kitchens, and sometimes even stores). Thanks to some glorious nature (possibly the reason you’re considering visiting in the first place), camping is hugely popular among locals and visitors alike. As luck would have it, we recently wrote a comprehensive guide to camping in Iceland!

Camping site in Iceland


Instead of a fancy hotel, consider one of the country’s many hostels. These accommodations range from quite rustic to surprisingly comfortable and luxurious. These characterful spots tend to reflect their owners’ charming tastes and oddities – from 70s style décor to quirky uses of space.

Hostels also tend to have good spaces for cooking and eating your own meals, for those of you who want to avoid eating out and keep those costs down.

HI Iceland is a non-profit organization with a chain of hostels located throughout Iceland. It’s worth your while registering as a member as there is a great value to be found here.

If you’d like to treat yourself to a hotel stay, Arctic Adventures has a range of accommodation at various points of the price scale.

Budget Friendly Tours – under 15.000 ISK.

River in Landmannalaugar

Secret hot springs in Iceland

There is no need to be afraid of tours in Iceland where you are on a budget it’s just all about finding the right tour.

An excellent choice – covers all the highlights, Gullfoss waterfall, Strokkur geyser and Þingvellir national park and then also includes a dip in the amazing Secret Lagoon at the geothermal paradise Flúðir.

Golden Circle and Secret Lagoon – 11.990 ISK

FROM REYKJAVÍK – pick up included or still under the price limit.

Frozen Gullfoss waterfall in Iceland

Whale Watching from Reykjavík harbor – 10.990 ISK

The royalty of the sea. There are a few things in this world as breathtaking as seeing a whale in its natural habitat. This is an experience you will never forget. Also, the company is so certain that you will see a whale that if you don’t, you can come back for no extra cost!

Whale watching in Iceland

Lava Caving – 9.980 ISK

Explore the magic of the underworld. You thought Iceland was beautiful above ground, try going under. Here you will get to experience the charm of the volcanic activity of Iceland. A half day tour and one of the most budget-friendly tours in Iceland.

Guided tour in Lava cave, Iceland

Hot Spring Hunt – 12.990 ISK

Drive to Hveragerði e. Geyser Garden and hike up to alluring Reykjadalur e. Smokey Valley. Really get to know the geothermal activity of Iceland, surrounded by steam and smoke for mud pits and hot pools before soaking in a hot river that flows through the river. This tour is great in summer and winter!

People bathe in hot spring river, Iceland

Reykjavík pub crawl – 14.990 ISK

Feeling like having a drink? Why not get a lesson in how to drink, Icelandic style!

Friends enjoying drinks at the pub in Iceland

Icelandic horseback riding – 11.400-12.500 ISK

Oh, the magic of riding an Icelandic horse. There is a reason Icelanders are so fond of this animal. The Icelandic horse has the fifth gate that no other horse breed has, it’s called tölt and it’s the softest out there. They are also known to be friendly, passionate and have big personalities. You just must try riding one!

Small-group horseback riding tour, Iceland

Glymur waterfall hiking tour – 12.990 the pick up 2000 ISK extra.

This stunning waterfall is located inside the fjords Hvalfjörður. It was once the highest waterfall in Iceland but the Icelandic landscape is always changing so now it’s the second highest. The hike is gorgeous going through a cave and fertile hills. The story of the Glymur waterfall and surroundings is even more magical, we recommend the read.

Glymur waterfall in Iceland

FAR FROM REYKJAVIK – You will need a car to get there

Glacier hiking on Sólheimajökull, Glacier Experience – 9.500 ISK

If you choose the early tour at 09:30 it’s only 9.500 ISK per person – that’s a price you will not see anyplace else. This is a great way to explore the Sólheimajökull glacier just about 2,5 hours drive out from Reykjavík. Perfect on the same day would be a visit to Seljalandsfoss and Skógafoss waterfall.

Sólheimajökull Glacier in Iceland

Sólheimajökull glacier in Iceland

River Rafting in Gullfoss canyon – 13.990 ISK

This is the true local experience. Icelanders celebrate graduations, weddings, anniversaries and much more with rafting trips. Join them for the great price of 13.990 ISK per person. You can add a beer tasting tour for only 2000 ISK extra. A great way to spend the day and close to the Golden Circle.

Guided rafting tour in Iceland

Hiking tour in Landmannalaugar – 12.990 ISK

We just can’t get enough of this place. Landmannalaugar is a geothermal paradise in the Highlands of Iceland. You’ll need a 4×4 car to get here but it’s so worth it even just renting it one day. The hike is in the most stunning setting ever, colorful rhyolite mountains and lava fields before bathing in a hot pool located under a lava wall. Hello, paradise!

Iceland Landmannalaugar

Hiking in Landmannalaugar highlands, Iceland

Whale Watching from Dalvík – 9.990 ISK

The North is known to be a playground for numerous whale species who nest near Dalvík and Akureyri. I swear it’s like they are planning to put on a show for us. This is a tour you’ll remember forever.

Whale watching from Rib boat

Whale watching tour in Dalvik, Iceland

Glacier hiking in Skaftafell, Glacier Wonders – 10.990 ISK

Skaftafell is located about 5 hours away from Reykjavík. It’s a nature reserve and for many Icelanders the most beautiful place in Iceland. Here you will find Vantajökull the biggest glacier in Europe and from is an outlet glacier called Falljökull. This is the glacier you hike on during the Glacier Wonders tour. A must-do while visiting the area.

Glacier hiking in Iceland, photo by Norris Niman

Do you have any cheap tips? Share it in the comment section below.

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