Is Iceland expensive? Yes! The country is small, has a short growing season, doesn’t have a lot of crops, and has to import a lot of things it needs.

So again, can Iceland travel be expensive? Yes. But don’t worry—an affordable iceland vacation is possible! You can beat the system and visit the country on a budget! You just need to be mindful of your spending. A typical Iceland budget is usually around $80 – $100 a day per person. If you’ve ever wondered, “Is Iceland cheap?” The answer is no. The best way to travel in Iceland is to go during the off-season in winter when you can get cheap flights.

Getting to Iceland

Reaching Iceland is simple from both North America and Europe. Major airlines like Delta, American Airlines, and Icelandair fly into Keflavik International Airport, about 45 minutes from Reykjavik. Use Skyscanner to find the best deals by searching for the cheapest travel dates.

From Europe, flights are often quicker and cheaper. Budget airlines like easyJet, British Airways, Wizz Air, and KLM offer affordable options, with flights from London starting as low as USD 43.

If you’re traveling between North America and Europe, Icelandair still offers a free stopover in Iceland. For a budget Iceland trip, plan, use budget airlines, and consider traveling during the off-season to save money on flights and accommodations.

1. Hitchhike

Iceland is one of the easiest and safest countries in the world for hitchhikers. You can find rides throughout the country. Though harder, it’s also not impossible to find a ride in the off-season or the sparsely populated north. Be sure to do your research so you aren’t stranded. 

2. Drink Tap water

— The water in Iceland is safe to drink and healthy. A plastic bottle of water costs about USD 3, so bring a metal water bottle with you and refill it from the tap. It will save you a lot of money and help the environment. There’s no reason to buy water here.

3. Camp

— In Iceland, camping is available nearly everywhere. You can camp in designated campgrounds for about USD 14 per night, and some hostels allow you to put up tents too. For an affordable Iceland trip, camping is significantly cheaper than staying in hostels. Bringing your sleeping bag would certainly help. If you’re on a tight budget, you can even camp in the wild, as it’s legal as long as there’s no sign posted to the contrary and it’s not private land.

4. Become a Hostel International member

— Most hostels in Iceland (especially outside Reykjavik) are part of the Hostel International group, which means they give discounted rates to members. Hostel dorms cost $27-33 USD per night, and HI members get USD 5 off, so if you plan on staying in hostels, the USD 28 annual membership will pay for itself in no time

5. Bring your own sheets or sleeping bag

— Many hostels in Iceland charge you a fee for bed sheets if you don’t have your own or a sleeping bag (pillows are free!). Linen fees begin at USD 10; however, be sure to research your hostel thoroughly as some will not allow you to bring your own sheets/sleeping bag

6. Drink alcohol as little as possible-

As taxes are quite high in Iceland, it becomes really expensive to drink there. Here are some rates-

• Beer: USD 10 (happy hour: USD 6)
• Wine: USD 12
• Bottle of wine at the store: USD 20
• Bottle of wine at a restaurant: USD 30+
• Shots: USD 8

Don’t drink and your budget will be fine! OK, maybe once in Reykjavik since it’s nightlife is world-famous. But other than that, don’t. You’ll save a lot and feel a lot better. 

7. Cook your own food and shop from grocery

— I found the food to be the most expensive thing in Iceland. Eating out costs about USD 15 or more per meal. 

Go grocery shopping.  Buy everything you need — such as eggs, cereal, pre-made sandwiches, and pasta — and cook. All hostels, guesthouses, and campsites have kitchens. 

Try to shop at BONUS stores as they have the lowest prices.

8. Eat hotdogs

— If you are going to eat out, eat at sandwich and hot dog stalls you find throughout the cities. They offer the cheapest (but not healthiest) food in the country. A hot dog costs about USD 3.50 and a sandwich will run you about USD 13 (about USD 17 with a beverage). 

9. Get a bus pass

— During the summer months, you can purchase a countywide bus pass for USD 323. On the off chance that you would prefer not to bum a ride, this will be your next least expensive alternative for getting around Iceland on a financial limit.

10. Rent a car

— If you are coming in the off-season, staying for a week or less, or don’t want to hitchhike, I would rent a car. They cost between $40-70 USD per day but you can split the costs with traveling companions (or by picking up travelers on the road!) and you’ll get a lot more flexibility than if you take the bus. The best of Iceland isn’t found along its main highway.