Tips For Traveling Iceland On A Budget

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My top tips for traveling Iceland on a budget

Iceland is expensive. There is no getting around it. You can drop a bomb of money in Iceland even if you are really careful. Here are my top tips for surviving Iceland with your budget intact.

Tip 1 – Be Realistic About Prices

Knowing that Iceland is very expensive before you start planning is key to staying within your budget. You will find Iceland to be one of the most expensive places on earth so you need to know some standard costs before you even start planning. Don’t think you are going to budget $60 a day for Iceland. Oh No! It is crazy expensive and I’m Australian (Australia is expensive also).

Accommodation Costs In Reykjavik:

  • The Galaxy Pod hostel in Reykjavik goes for around $77 AUD per night and is a great option for a little more privacy than a standard dorm room.
  • A bed in a female dorm room in the Loft HI Hostel is around $56 per night. Mixed dorms are around the same price but I hate mixed dorms so I never look at them.
  • A room in a guest house like Guesthouse Galtafell which is in a great location, is around $90 for a room with a shared bathroom, or $130 for a room with a private bathroom.
  • An apartment (which would be my next choice after a hostel purely for the cooking ability) like Iceland Comfort Apartments will set you back at least $100 AUD per night or a hotel like the budget 201 Hotel with breakfast included will be at least $150 per night.


Even though some apartments have “kitchenettes” be sure to check the photos for a hotplate. Often they have one single plug in hotplate which will limit you to noodles. That could work for your budget, but you might get a bit sick of noodles after a week!

We stayed at Island Apartments which I really liked. Brad was with me on this trip so it was worth it between us. We paid $200 AUD per night for both of us. They are small apartments, however they have a table (which Brad needed as he was doing some work this trip), a separate sofa to sit and watch TV (I can’t sit on the bed and do anything or my back is shot the next day), easy access and a great location.

All the tours we did picked up a block away and in the cold of Reykjavik that was perfect!

Food Costs:

Even from the supermarket food isn’t cheap in Iceland. So much so that when we got to Amsterdam which is known to be a little pricey it seemed cheap! Supermarket shopping is the way to go, however even if you eat yoghurt and fruit for breaky, make your own sandwhiches for lunch and 2 min noodles for dinner, you could still easily spend $25-30 per day.

I usually only eat 2 meals and then some fruit in the evening so I could have kept it to that fairly easily, however Brad is a dinner eater which meant that we did tend to eat out probably once per day. Lunch is by far the most cost effective meal to dine in for. Dinner can be really crazy.

We did one night at a local Italian restaurant as we were both just shattered after a few huge days. We both had one drink each, ate only a main meal (no starters at all) and a bread and it was $130 AUD. Far out! That would be $60 in Australia. The 2 glasses of wine were almost $18 each which was just crazy. We went back to ramen after that!

One thing that is a godsend in Reykjavik is the hot dog carts. It was the last thing I expected but they were amazing. I think the hot dogs were around $3 and not super big but on the way home a few times we just grabbed 2 hot dogs each and that was dinner. I’m not even a fan of the humble hot dog but they were so good!

A cool little cafe in Reykjavik
A cool little cafe in Reykjavik

Tours, Cars and Sightseeing Costs In Iceland

Hire Cars:

Iceland does have its fair share of places that are free to visit, however you will end up either doing tours or hiring a car to do all the best locations yourself. If you are visiting smack bang in the middle of summer and will be happy to have the odd location you can’t visit, a small two wheel drive car will be OK.

  • Expect to pay around $300 USD per week for a Hyundai I10 or a Kia Rio.
  • An AWD will start at around $450 USD per week and
  • A full 4WD could set you back $650~$1500 USD per week!

This will save you a massive amount on tours, however if you are on your own it will be a close call. Read these important tips for hiring a car in Iceland and familiarise yourself with what you need to know.


A day tour of the Golden Circle will be around $100 USD (which by the way is pretty good).

If you add in adventure activities like snowmobiling you could increase that up to $350 USD.

A South Coast Tour will set you back around $90-$130 USD

Tip 2 – Don’t Visit Iceland On Your Own

I know I’m the solo female traveler spokeperson, however, as Iceland is not a cheap destination, if you can share the cost of a car and accommodation with at least 1 other person you are instantly 50% better off. If there are 3 or 4 of you even better. Even if you do go as a solo traveler, Iceland is amazing so don’t let the expense put you off. Just be aware so you aren’t shell shocked a week in.

The Icelandic plains from Thingvellir National Park
The Icelandic plains from Thingvellir National Park

Tip 3 – Do Sober October or Dry July

Drinks are widly expensive in Iceland. A beer can set you back $10-12 and more upmarket drinks can be hideously expensive. Grab a bottle of something at the airport duty free or practice Dry July or Sober October in whatever month you are there. You could easily spend hundreds of dollars a week on just a few glasses of wine per day.

Tip 4 – Prepare Your Own Food

As mentioned above in the food costs, it is heaps more cost effective to prepare your own food in Iceland which will save you a massive restaurant bill. Even the take out food isnt’ super cheap in Iceland, however the supermarkets (especially the BONUS markets) are much more affordable.

If you have some money left at the end of your trip, do try some local food however. The best way is to do a Walking Food Tour of Reykjavik which we LOVED! It was $130 each but included 9 food tastings and 5 beer tastings, a visit to Hallgrímskirkja, the Alþingi Parliament House and the Harpa Concert Hall. It was supposed to go for 3 hours however it was almost 4.

YES it isn’t cheap but it was the most cost effective way for us to sample some traditional food. Some of the restaurants have tasting plates however they are $30~40 and tiny. I felt like I was supporting true Icelandic businesses and the food and beer were great. I honestly felt that because we were so careful with our food prep and planning during the balance of our trip, that this was a worthy splurge.

TIP: Iceland has laws that mean that products are marked as expired way earlier than they are in Australia. This means you can have quite a score with meat in most supermarkets. It’s usually around 50% off and while it does say its “expired” it’s fine – they just discount it to get rid of it. All the meat we bought in Iceland was discounted meat and it was all great. We did also get things like Yoghurt marked down as well.

Jenny Marsden - Charge The Globe
About the author

Meet Jenny, a passionate Australian travel blogger who has explored 103 countries to date. With over 30 years of travel experience, Jenny has a wealth of knowledge to share with her readers about the cultures, landscapes, and people she has encountered on her journeys. She’s always battling unfashionably frizzy hair and you will never catch Jenny in anything but comfortable shoes. Learn more about Jenny and her travels.

Tip 5 – Get The Public Transport

The buses are regular and clean and very affordable. The timetables weren’t quite as tight as Japan, but they were usually always on time and there was always space. I found the drivers to be very accommodating and helpful, much more so than anywhere else I’ve been in fact. In the city, the bus stops are set in stone, however as you get out of the city, as long as its safe they will gladly pull over and let you off when you would like.

A bus driver suggested this amazing private little beach to us one day and dropped us off and also stopped to pick us up on the way back. It was a tiny village with one bar/restaurant/cafe set on a stunning black sand beach and it was about 2km walk in from the road but one of the prettiest locations we saw in Iceland.

Tip 6 – Walk

Between the cities you will need to use the public transport, but in the cities, even in the winter you can walk pretty much everywhere. City walk does a free Reykjavik Walking Tour and was still running in November when we were there. There is also a free walking tour done by two local commedians which has come highly recommended. I haven’t done it but it is supposed to be good.

Tip 7 – Use the Free Hotsprings

There is a website called Hot Pot Iceland that shows you all the free hotsprings around the island. Its amazing!

Tip 8 – Don’t Let The Cost Discourage You

I’m going to go out on a limb and say that most people who visit Iceland are going to do it once in their life. If that’s the case for you, don’t get so hung up on the expense. Think of the cost of flights to come back and do “whatever” next time and put your hand in your pocket and do it now. While Iceland is expensive – MOSTLY – it feels way more expensive than it actually is, because there is so much to see.

You spend a bucket load of money, but when you come home and start sorting through photos, you will be amazed at the locations you’ve visted and the things you’ve seen.

Stay out of the restaurants and spend your hard earned dollars on experiences and you won’t regret it I’m sure.

Bonus Iceland Budget Tip

Consider doing a tour. They do seem expensive if you don’t know how much it costs in Iceland however, knowing what you are up for before you go might be the best thing for you. Also consider when you are travelling. It does seem pointless going to Iceland in the winter, however there is still quite a lot of things to do in and around Reykjavik in particular AND any tours at this time will most likely be cheaper due to the lesser demand.

Check out Tour Radar’s Iceland Tours for something that might suit your time frame and budget.