See the Best of Iceland on a Budget

Have you ever wondered what it might be like to be so wealthy you don’t have to give a second thought to the cost of a holiday? Unlike the mega-rich, however, most of us have a budget to stick to when we travel and it’s best if that budget can stretch as far as possible. Unfortunately, Iceland’s long had a reputation for being expensive. In fact, a recent survey reported that it came top of a list of the world’s most expensive countries.

However, that doesn’t have to be a deal breaker: if you’re visiting Iceland on a budget, don’t rule out holidaying here. It’s entirely possible to cut corners on costs without erasing all those elements that make this part of the world such a special place to visit. If you’re hoping to see the best of Iceland on a budget, our article will combine money saving suggestions with practical advice to help you pull off a memorable holiday here as cheaply as possible.

One of the biggest outlays when planning an Iceland holiday is the cost of getting here. Iceland’s location in the middle of the North Atlantic means it’s not as straightforward as driving across the border to a neighbouring country as it might be if you’re holidaying closer to home in North America or mainland Europe. Your options are limited, as the only international ferry serving Iceland tends to be very expensive.

With the demise of Play and cuts to the schedule of low-cost airlines such as easyJet, it’s more likely you’ll encounter higher flight prices, especially as aviation fuel hikes and other factors are driving up airlines’ operating costs. However, it’s still possible to fly in low season for the equivalent of around £150 return from the UK and under $500 from the USA.

Travel off peak and travel light

It’s worth being flexible on the day you fly; as many working travellers like to take a complete week’s break, flying mid-week to mid-week can have a surprisingly significant effect on your bill. Likewise, seeking out an airline that includes baggage as standard or travelling light so that you can fit everything you need into a free carry-on bag will limit additional fees and charges.

Embrace low or shoulder season

If you need to fly as cheaply as possible, then you need to think about when other people won’t want to travel. Avoid holiday weekends, stick to school term time and time your trip for when the weather’s more of a gamble. Off season trips in months like November and January will usually work out cheaper. And remember, although there’s more risk of weather-related flight disruption, you may be lucky enough to have clear skies and witness the Northern Lights.

Set up flight alerts and sign up for airline newsletters

If you want to be ahead of the pack so you can jump on a deal as soon as it becomes available, then make sure you are going to get the information. Sign up for email newsletters from airlines that fly to Keflavík from your nearest airport; when they announce offers and sale fares, grab one before they sell out. Setting up flight alerts with Google or Skyscanner is also a good way of knowing when fares change without having to search over and over again.

Be prepared to travel indirect

Particularly for short breaks, travellers opt for time-saving direct flights but if you are prepared to take a connecting flight you can save money on the cost of your fare. You’ll have to allow more time for the journey, but it’s worth the inconvenience. Be sure to purchase a through ticket so that if you miss your connection it’s the airline’s responsibility to get you to your destination without you having to fork out for new flights.

Once you’ve sourced affordable flights, it’s time to turn your attention to what happens once you’ve reached Iceland. By travelling independently and unpackaging your trip, you’ll be more in control of how to allocate your limited budget according to what’s important to you.

Save money on accommodation by considering camping, especially if you’re coming in summer. Dorm beds in a hostel are another possibility if you need to keep costs as low as you can. Sharing with a partner or friend enables you to split the cost of a simple guesthouse. Choosing a basic hotel on the outskirts of Reykjavik is another savvy move. Self-drivers will appreciate the free parking that many such properties offer.

Meanwhile, if you plan to take tours, be sure to find accommodation that’s close to one of Icelandia’s bus stops. Locating yourself near to a city bus stop will also help, enabling you to travel cheaply to and from the city centre to tourist attractions, cafés, restaurants and bars rather than need to hail expensive taxis.

Cut down on food costs by shopping for packed lunches at grocery stores and budget supermarket chains like Bónus and Krónan. Sample Iceland’s uniquely flavoured hot dogs as an alternative to a sit-down dinner, or grab a takeaway lamb soup at a gas station on the way back from a tour. Travelling to Iceland on a budget doesn’t have to have a negative impact on your taste buds. Our guide to budget travel in Iceland has more food-related money-saving tips.

If you’re travelling in Iceland on a very limited budget, then every minute counts. Firstly, weigh up the pros and cons of the different seasons. Summer is characterised by longer days, and the extra daylight translates to more time to do activities each day. If you have the stamina, then cramming it all into a shorter space of time makes sense – even if flights and accommodation are likely to be more expensive.

The opposite is true in winter. You’ll save big on flights and accommodation as you’re firmly into low season, but there’s significantly less daylight to play around with, especially from late November through until the end of January. Of course, this also means there are plenty of dark skies to please aurora hunters.

However, timing your visit for either side of midwinter delivers earlier sunrises and later sunsets, so this means you potentially can see more when you’re out on your sightseeing tours. We should add that most of these tours operate year-round, but if you’re keen to enjoy the scenery to and from the major landmarks then this may have a bearing on your decision.

Identifying your must-sees will help you figure out the absolute minimum amount of time you might need for your Iceland trip. Trimming away spare time means you’ll have a more tiring trip, but you won’t be paying extra for accommodation just to sit in a bar drinking (expensive!) beer.

Within the city, seek out free activities and concentrate on sightseeing that won’t cost you a penny. Admire iconic Hallgrimskirkja church, whose design was inspired by the country’s basalt columns. Take a stroll along Sæbraut to admire sculptures such as the Sun Voyager and landmark architecture like Harpa, the city’s waterfront concert hall. It costs nothing to window shop on Laugavegur or to grab a selfie on colourful Skólavörðustígur (Rainbow Street).

Let’s assume you don’t want to miss out on Iceland’s three main sightseeing areas: the Golden Circle, the South Coast and the Snæfellsnes Peninsula. Allocate a day for each of these and opt for a tour so you can rest while the driver takes care of transferring you to and from Reykjavik. Depending on flight times and how keen you are to get to know Iceland’s capital, you can actually achieve a lot during a four-night stay.

Check out our itinerary ideas for every traveller for more practical inspiration. We have tried and tested tips for first-time visitors plus suggestions for a four-day, five-day, six-day and seven-day tour of Iceland on a budget.

With thoughtfully considered and skilful itinerary planning, scheduling multiple tours and activities per day is easily doable; seek out south coast or Golden Circle combo options on Icelandia’s website where we’ll either incorporate a second activity into the basic tour or ensure you’re back in Reykjavik in good time to connect to a tour that departs later in the day.

By booking the Golden Circle Direct tour, for instance, you can comfortably fit in another activity as the main tour lasts about six and a half hours. That might be a whale watching trip or a visit to one or two of Reykjavik’s must-do attractions such as Lava Show, Perlan or FlyOver Iceland. You might also choose a thrilling activity such as a glacier hike or snowmobiling: not cheap, but if you’re going to splurge on something, you may as well make it something you can’t do at home.

You’ll probably be keen to soak in one of the country’s famous hot springs, but save money by choosing one of the more rustic options such as Secret Lagoon over a swanky choice like Sky Lagoon or Blue Lagoon. Remember to bring your own swimsuit so you don’t have to buy a new one in one of Reykjavik’s pricey clothing stores.

Visit Iceland on a budget from late August to mid-April but try not to miss out on seeing the Northern Lights if they show up. As tours depart well into the evening, this can easily be done even if you’ve been out sightseeing along the South Coast or the Snæfellsnes Peninsula – both longer day trips than the Golden Circle.

Bus #55 shuttles to and from the airport. Though you’ll save money, it also adds more time to your transfers in both directions so you may opt for the FlyBus airport transfer as a quicker, comfortable and reliable alternative – and far cheaper than hopping in a taxi. An extensive yet affordable city bus network takes care of longer journeys within Reykjavik itself.

Further afield, Iceland’s relatively small permanent population doesn’t support frequent long-distance bus or coach services. Though you might be able to make such timetables work for your needs, taking a tour will give you more time at your destination and take away the potential stress arising from missed connections.

A popular option with many travellers to Iceland is to book a tour that takes you to the world-renowned Jökulsárlón Glacier Lagoon. At 35999 ISK per person, it’s not cheap; however, when you consider what’s included, it starts to look like much better value for money.

For starters, you’ll be driven around 250 miles along the scenic south coast of Iceland, passing lava fields and black sand beaches – with stops at other striking landmarks along the way. The tour price also includes a boat trip out on the lagoon to get a closer look at its icebergs.

The same principle applies to Golden Circle tours, though as this delightful region is closer to the capital you’ll find it’s far cheaper as the tour is shorter than the one to Jökulsárlón. Even so, in less than seven hours you’ll still experience three of the country’s most extraordinary locations taking advantage of our express version of the tour.

Let’s use the aurora to show you how to cut costs on tours. Our regular Northern Lights tour costs a budget-friendly 8999 ISK per person, but if you opt for a small group minibus tour where passenger numbers are capped you’ll need to fork out a bit more as this will cost 14499 ISK per person. Potentially this gives you a bit more attention from the guide which is helpful if you’re likely to need more help on the night, such as while photographing the aurora.

At 24990 ISK per person, super jeep Northern Lights tours require a far more generous budget. However, the extra cost really comes into its own on nights where cloud cover is patchy; these are specially-modified vehicles that can go anywhere there’s a road or track. You might also feel it’s worth the splurge if the forecast suggests the aurora is going to put on an unusually bold and intense display.

Travelling to Iceland on a budget is absolutely possible – it just takes a little thought and careful consideration. While you’re still at the planning stage, work out what’s going to make you happiest before browsing the top attractions in Iceland for your style. But don’t forget, there’s really no such thing as a bad experience, so figure out how much you have to spend and then come to Iceland so that the country can work its magic.