How To See The Best Of Iceland On A Budget

Exploring the wonderful natural beauty of Iceland doesn’t have to mean emptying your wallet. Despite its reputation for being on the pricier side, Iceland offers a treasure trove of experiences that don’t cost a dime.

Whether you’re hiking through pristine trails or exploring geysers, some of Iceland’s core tourism experiences can be enjoyed without the need for running up a massive credit card bill.

From its breathtaking landscapes and cascading waterfalls to its unique geothermal phenomena and dancing northern lights, Iceland’s natural wonders are largely accessible for free.

So, with some careful planning and sensible decisions on transport and accommodation, it’s possible to enjoy the best of Iceland for cheap.

What’s Expensive In Iceland?

Although Iceland isn’t completely barren, its complex geography means that not much is actually made in the country. Iceland’s primary production is geothermal energy, widely available, which lowers the cost of power and heating for all islanders.

However, most products aside from some meats, fish, and wool are imported, which drives up costs for everything else. This increases local salaries, which, in turn, increases costs for tourists.

Hotel accommodation, meals, and souvenirs will all cost significantly more than most travelers might expect. In fact, the cost of living comparison site Numbeo currently lists Iceland as 6.9% more expensive than Norway, a country often perceived as Europe’s most expensive.

Another issue for tourists is that it’s not always easy to assess value in Iceland due to the difficulty in calculating exchange rates.

For example, at the time of writing, 1,000 Icelandic krona is worth $7.25. That makes figuring out the true cost to you of something priced at, say, 17,500 Icelandic krona, requires some serious mental gymnastics.

Iceland’s Natural Attractions

As tempting as it is to get a selfie at the Blue Lagoon for bragging rights, entry to the world-famous site costs up to $100 in high season. But much of the reason for the attraction’s fame is simply clever marketing.

Save your money and visit a much cheaper alternative, where you’ll enjoy a very similar experience.

Iceland is jam-packed with fantastic natural attractions that cost nothing except the means of getting there. The country’s landscape is a patchwork of waterfalls, geysers, hot springs, glaciers, volcanic landscapes, and stunning coastlines that are accessible without admission fees.

Waterfalls: Don’t miss the chance to see some of Iceland’s most famous waterfalls such as Seljalandsfoss, where you can walk behind the cascading water, and Skógafoss, known for its sheer size and beauty. Both are located along the south coast and are easily accessible from the main road.

National Parks: Iceland’s national parks, including Thingvellir, Vatnajökull, and Snæfellsjökull, offer a plethora of sights and activities at no cost.

Thingvellir National Park, a UNESCO World Heritage Site, is a unique place where you can walk between two tectonic plates. Vatnajökull National Park boasts Europe’s largest glacier, where you can marvel at ice caves, glacial lagoons, and dynamic landscapes.

Geysers: Although volcanic eruptions aren’t an everyday occurrence, geysers are one of the visible indicators of Iceland’s volcanic activity hiding just below the surface. The Geysir Geothermal Area, home to the Strokkur geyser, which erupts every few minutes, is another must-visit site that’s free to access.

Hiking trails: Iceland is a hiker’s paradise, offering countless trails that cater to all levels of experience. Hike the trails around Landmannalaugar to see its multicolored rhyolite mountains and lava fields, or explore the dramatic landscapes of the Fimmvörðuháls glacier trek.

Northern lights: From September to early April, the northern lights can often be seen in Iceland. Patience and clear skies are essential for this unforgettable experience, and you’ll increase your chances by heading north.

Iceland Budget Travel Tips

The best approach when visiting Iceland is to be prepared to pay for the things that matter to you, but take advantage of savings when and where they are available. As with most ways of cutting the cost of travel, this involves some advance planning.

Book Rental Cars Well In Advance

Renting a car is often seen as a necessity for exploring Iceland’s vast landscapes, but it can also be one of the biggest expenses of your trip.

To save money, book your rental car several months in advance, especially if you’re traveling during the peak season. Prices can double or triple closer to your travel dates, that’s if vehicles are even available.

Additionally, consider renting a smaller, more fuel-efficient car, as gas prices in Iceland are high. Compare prices across different rental services and look for deals that include insurance and/or don’t limit mileage, as this can significantly reduce your overall spending.

Consider Organized Tours

While it may seem counterintuitive when trying to save money, in some cases, joining organized tours can actually be more cost-effective than going it alone, especially for remote or hard-to-reach areas or for non-drivers.

Tours can provide value by including transportation, admission fees to attractions, and sometimes even meals. Group tours can also offer insights and access to experiences you might miss out on otherwise.

Solo travelers can benefit most from such tours, as there’s no-one to split costs such as rental cars with when traveling alone. If you’re not keen on group travel, look for small group tours for a balance between cost and personal experience.

Travel Off-Peak

Iceland’s peak tourist season runs from June to August. Traveling outside these months not only means fewer crowds but also lower prices and better availability on accommodation, car rentals, and some activities.

Consider visiting in the shoulder seasons—spring (April to May) or autumn (September to early October)—when the weather is still relatively mild.

The long winter season (late October to March) offers its own unique experiences, such as ice caving and the potential for northern lights, but prepare for shorter days and colder, more uncertain weather.

Consider Self-Catered Accommodation

To further cut costs, opt for self-catered accommodations such as Airbnb rentals, hostels with kitchen facilities, or camping during the warmer months. This allows you to save on dining out by cooking for yourself. On a longer trip, these savings can really mount up, even if your accommodation costs a little more.

Remember, tap water in Iceland is some of the cleanest in the world, so instead of spending money on bottled water, bring a durable water bottle that you can refill anywhere.