Travel Iceland on a Budget
Iceland is an expensive country, that’s a fact BUT there are budget friendly ways to go about visiting. Let me guide you through...
Considering a budget holiday to Iceland? Find out all there is to know about backpacking in Iceland, from money-saving to staying safe tips. Read now.
Adventurers of every kind feel right at home on this small island. Whether your pack is full of photography equipment, wildlife books, or crampons and ice axes, discover your perfect way to explore.
In Iceland, visitors will find themselves surrounded by rugged wilderness and vivid landscapes. So the best way to make sure you see everything you want to see is to get out there yourself, with nothing but you and a backpack.
Outside of Reykjavík, Iceland is a sprawling country connected by winding roads. Incredible waterfalls, black sand beaches, glaciers, and countless other volcanic footprints await you out there. As a result, backpacking is no mean feat. With our complete guide for backpackers, you’ll know exactly where, when, and how to get started.
Iceland is ideal for a wide range of holiday-makers. Even if you’re following the marked paths, there is adventure around every corner. Those looking for a more rigid dive into the wilderness will enjoy an organized taste of the wild on our multi-day tours, but escaping the beaten track is also not impossible.
For adventurers on a budget or hikers hoping to catch something less common with their camera lens, there are opportunities galore for backpackers in Iceland. The Ring Road makes it easy to reach the furthest corners of the country, with everything you need packed in the trunk. However, if you’re more comfortable on foot, there are day or week-long treks in the colorful rhyolite mountains of Landmannalaugar. Incredible views await you just about everywhere, whether you’re eager to delve into the rugged center of the island in Iceland’s Highlands or stick to more iconic attractions closer to Reykjavík.
When you choose to visit is completely dependent on your individual preferences. More adventurous visitors will love the possibilities summer brings, while budget travelers might opt for winter or autumn to avoid the crowds and peak prices. There are also different activities on offer depending on when you choose to visit - for example, the Northern Lights only really appear in the darker winter months. However, your chances of spotting the stars of Iceland’s wildlife are highest in the summer. They say there is no ultimate best time to visit Iceland, it’s a completely personal choice.
While it’s a relatively small country, traveling around Iceland is fairly slow going. This means that the amount of time you have to spend in Iceland will impact the extent of your adventure. Here are a few of the most popular backpacker routes around the country - easily tackled with 4 wheels!
Thanks to the Ring Road, you can take in the whole of the country and all its coasts have to offer. The road is easily navigated, as long as you have 4 wheels and the weather is good enough! Starting in Reykjavík, this perfect summer road trip includes all the main hits of the Golden Circle to begin with. After you’ve relaxed in the area closest to the capital, the road opens up and you can hit some of the more off-the-beaten-track destinations. Ice caves, glacier lagoons, and cozy towns all feature on this busy 10-day self-guided trip, ideal for backpackers making the most of their time in Iceland.
If you don’t quite have the capacity for the whole of Iceland, this 7-day itinerary will tick off all the items on your Iceland bucket list and add some new ones! Hit the dramatic landscapes of the Snæfellsnes Peninsula before seeing the essential Golden Circle attractions of the southeast. This itinerary also features an enthralling glacier hike, and an incredible experience on the incredible Vatnajökull Glacier.
While Reykjavík is a popular starting point, you may find it more affordable to start a little away from the crowds in Iceland’s northwest. This 5-day itinerary features Northern Lights chasing, iconic waterfalls, and some insights into Iceland’s humble beginnings. It also features the Snæfellsnes Peninsula, which has earned the nickname “Iceland in Miniature” for its varied landscapes and the number of natural must-see destinations in such close proximity.
If you’re a little more pressed for time, 3 days might have to be enough to tick it all off your list. Luckily for you, the south coast of Iceland is incredibly accessible from your most likely landing point, Keflavík International Airport. And there’s a reason it’s so popular among travelers of all kinds! South Iceland has some of Iceland’s most iconic locations, including black sand beaches, Þingvellir National Park, Seljalandsfoss Waterfall, and plenty of short hikes for avid walkers.
There’s no way around it - Iceland might be on the more expensive side of your travel destinations. Reykjavík has a range of accommodation options, with hotels and hostels available for budget travelers not after the heights of comfort. Opt for accommodation further from the city center for slightly lower rates, and it’s always best to book your rooms as far in advance as you can.
Your accommodation options are more limited once you set foot out of the capital. Small towns and hamlets might have hotels or B&Bs available, but make sure you plan ahead to avoid getting stuck - particularly in poor weather. If you choose to go for more rural methods, such as camping, it's imperative to leave everything as you found it. To minimize the impact of tourists on the environment, it's important that all visitors respect Iceland's beautiful landscapes and natural habitats.
For those with the right equipment, camping in Iceland can be a more affordable option for accommodation, especially when seeking adventures outside of the larger cities. It’s always best to head to designated camping grounds to ensure you aren’t trespassing on someone’s land. For campervans and caravans, this is imperative. Leaving no trace is always the policy.
For tent camping, you can also consider wild camping if your plans are more spontaneous, though it’s important to check that you have permission if required. This will depend on whether you’re camping on farmland or near a farm, which might be the case without even realizing it. Some farmers will allow you to use a small patch of land for the night, but be aware you must ask for permission and some may ask for a small fee.
Another flexible and more spontaneous accommodation type is your vehicle. Should you have rented a car to travel around the country, an excellent way to see everything at your own pace, you can always head to a nearby campsite as the sun sets and get some rest in the warmth of your car or campervan.
Finding your way around Reykjavík is relatively easy, even without a car of your own. Public transport in the form of buses can get you to most places you’ll need to go around the city. If you’re really stuck, there are taxis, but these can get pretty expensive for a budget holiday. For distances too far for tired legs, why not hop on one of Reykjavík's electric scooters?
As already stated, the majority of Iceland is pretty sparsely populated. Around 65% of the country’s population resides in or near Reykjavík, with the rest scattered among small towns and farms, or in the town of Akureyri to the north. It’s exactly for this reason that public transport into the wilderness is almost non-existent. For most roads, especially in winter, you’ll need 4 wheels.
Many visitors choose to rent a car from the countless providers of hire cars in and around Reykjavík, or at the airport. Your own rental car can work out as the cheapest way to get around while hitting all the spots you’re eager to see. Acting as storage, a bed, and a form of transport, a rental car is not to be sniffed at - plus, your car hire company might provide you with additional advice for getting to where you need to go, including advice for weather conditions should you need it.
For modest budgets, renting your own car may be out of the question. From Reykjavík, hitchhiking is a relatively easy task, and you’re likely to be picked up pretty quickly if on a road out of the city. While Iceland is a pretty safe county, even for lone backpackers, care should always be taken in these situations. Make sure someone in the country or at home knows where you are going at all times.
While most natural attractions are free to visit, such as waterfalls and geysers out in Iceland’s wilderness, the country is not known to be a budget destination. Here are our top tips for saving money while exploring to your heart’s content.
It’s always important to prepare as best you can for backpacking in any new destination. While Iceland is a notoriously safe destination for solo travelers, doing everything you can to keep yourself out of harm’s way is always recommended. This includes:
Our last piece of advice is to talk to locals where you can. They will know the best places to eat, stay, or camp wherever you are - particularly on a budget. Most Icelanders will speak pretty good English and are usually happy to help polite travelers across the country - so long as you respect their country.