We have taken budget holidays to Iceland on three different occasions. Never have we had a lot of money to play with, so we have been honing our skills and learning how to travel Iceland on a budget. We wanted to share these tips with you so you too, can have a cheap holiday to Iceland…well, cheaper anyway.

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Getting to Iceland on a Budget
1.) Budget Flights from Europe
Some airlines flying from Europe have some extremely cheap fares. Wizz Air, Easyjet and PLAY Airlines all offer fares below £100 return. Just remember to bear these things in mind when looking at the different options:
- Hand Luggage Restrictions – Luggage fares can quickly add up and all of these budget airlines charge for anything more than a small under seat bag. Check out the price for both large hanf luggage and checked in bags as sometimes, buying one checked bag can work out much cheaper. This is what we tend to do as it allows us to bring food to cook (more on that later) and heavy jumper setc, If you really want to do it with just hand luggage, wear everything heavy until you get on the plane, then disrobe and stuff it all in a big tote bag.
- The Airport Location – Compare prices for airports that are near to you, vs the ones you need to travel for. Sometimes, trekking from West London to Luton, Gatwick or Stansted, especially for eatly morning flights, bumps up the cost so much that it is easier and cheaper for us to go to Heathow.
- Book Early – We have managed to fly for around £60 between London and Reykjavik every time we have been by booking well in advance. Even some full service airlines like Icelandair can be cheap if booked soon enough.

2.) Try a Free Stopover
If you are planning to fly across the Atlantic, then you can take advantage of a free stopover. Both Icelandair and PLAY Airlines offer free stopover programs. This means you can choose an inbound date and then a date a few days later to continue the journey.
- PLAY Airlines – The “Stayover” means you can fly in and out again up to 10 days later at no extra cost. This doesn’t include any accommodation costs.
- Icelandair – Their stopover gives you up to 7 days at no extra charge. Again, there is no accommodation included but you can store your baggage with the airline for the duration of your stay.
Obviously, this only saves you money if you are already flying between Europe and the Americas.
Check out our review of PLAY Airlines HERE

Cheap Accommodation Tips for Iceland
3.) Book Your Accommodation Early
Iceland is not a large country and as such, it has less tourist accommodation than many other European spot. Over time, the rooms only get more expensive and can sell out. This is especially true outside of Reykjavik where there may not be many hotels or guesthouses to choose from. As soon as you have decided you are travelling to the island, get booking!

4.) Consider Different Accommodation Options
Hotels are not the only option in Iceland. You can also find great deals using some of these options:
- Hostels – Reykjavik has some brilliant hostels, both budget and boutique.
- Camping – Sarah campsites located all around the road where you can pitch at. Of course, toilets, and showers, and sometimes kitchen, but not always. Some camps have small pools and other recreational activities, which is nice. Campsites book up early so don’t just turn up. Wild camping is allowed if you have a traditional tent.
- Camper Vans – Combining a bit of glamping with your transport around the island, hiring a Campervan can be an excellent money saving option, you must use campsites and are not allowed to just park up anywhere (no matter what you may have seen on #vanlife videos.
- VRBO/AirBnB – short term rental sights give you a chance to stay in a house/apartment/room for a decent price. The main advantage of this is the possibility of finding a spot with a kitchen.
5.) Look for Hotels with Fun Freebies
In an expensive country, any included extras are a real win For instance, some hotels offer free hot tubs, swimming pools or spas. This is a nice, relaxing activity that you won’t have to pay any extra for. Some accommodations in quiet areas will lend you binoculars for nature watching or to help you spot the Northern Lights. You might come across a boardgame nook, perfect for a cold evening. Every little helps!
6.) Dont be Tempted Out of Town
Reykjavik is small…but it is not THAT small. If you intend to explore the city, take in the sights and enjoy the happy hours, you will want to be within walking distance. Buses aren’t that frequent and don’t run all night. Taxis are really pricy so just popping into town in one isn’t an option. Spend a little more and stay near the centre if you can.

What to Do in Iceland on a Budget
7.) Indulge in the Free Things in Reykjavik
Yes, there are a few free things you can do in Reykjavik. Here are some of our favourites:
- Harpa is the incredible concert hall right on Reykjavik’s waterfront. You can have a little look around and warm up for free. Admire the interesting window and mirror design, based on basalt rocks and have a poke around the gift shop.
- Although climbing the steeple tower costs, entering Hallgrímskirkja Church is completely free.
- The statues of Reykjavik are of course free and we love the Sun Voyager on the bay front, the Looking Seaward statue at the port and The Unknown Bureaucrat by the lake.
- Speaking of the lake. You can feed the birds here for a lovely bit of mindfulness. They are incredibly tame and even the swans will nibble bread straight from your hands…mind you, the bread isn’t free.
- You can join a free walking tour. Of course it is polite to tip at the end of a free walking tour if you have enjoyed it but even with that, it is cheaper than a walking tour would be.
8.) Soak in Cheap Swimming Pools
Blue Lagoon and Sky Lagoon might get all the big press. Your Instagram is probably swamped in them if it knows you are planning a visit to Iceland. It is true that a dip in soothing warm water is divine, especially when it is cold and dark outside. However, you do not have to fork out a fortune to do so. Iceland has plenty of public pools that cost a fraction of the price.
For example, Laugardalslaug in Reykjavik has a huge outdoor pool with slides, another for relaxing in and one indoors They also have 7 relaxation hot tubs inside including one that is salt water. It costs 1330ISK for adults and is free if you are 15 or under, over 67 or disabled.
Throughout the rest of Iceland, natural hot springs can be really cheap, or even free and most big towns have city pools.
9.) Look for Free Events
Before you travel, check out websites like What’s On in Reykjavik for free, special events. These are especially common in the off season months after Christmas. The city wants to keep everyone’s spirits up. In the flip side, there are lots of things on summer weekends as the city celebrates the chance to be out in the sunlight. You could find free museum days, gallery nights, music gigs and more.
10. ) Hunt Out Free Activities in Iceland
Iceland is a stunning island and many of its top attractions are completely free to visit. Black sand beaches, national parks and pretty parks are all free. It doesn’t cost anything to park up and watch the Northern Lights. Make sure you bring walking gear and you can do a stunning walk for a day. Bring a picnic blanket and you may get lucky enough to catch a warm day where you can sit and relax. Speaking of relaxing, there are some free hot springs too (Westfjords hot springs, Reykjadalur…and more).
Getting Around Iceland on a Budget
11.) Skip the Taxis
Taxis are expensive in Iceland. Fuel is pricy and there is no Uber or Lyft to create competition so the government-mandated meters are the last word. If you can, catch a Strætó bus. They have a pretty decent network and a tickets costs 480 ISK (£2.75). Compare that with a 15 minute taxi ride at 3500 ISK and you’ll see what we mean. If you plan to travel a lot, get a bus pass and the tickets are even cheaper.
12.) Budget Tips for Car Hire in Iceland
If you are planning to hire a car, here are a few tips to make it a little cheaper:
- Book Early – I’m sure you’re sick of hearing this but car hire does not get cheaper. The earlier you book the better the rate will be and the bigger choice of cars and suppliers you will have.
- Consider the Car – If you are visiting in summer, and planning to stick to the main ring road then you can get away with a cheaper car. Visiting in winter, or planning a route that includes the unpaved F Roads means you will require a 4×4. It is also worth noting that automatic cars cost more so driving a manual (or stick) can save you some money.
- Long vs Short Rentals – Strangely, the longer you rent, the better value it becomes. Sometimes the cost of a one day rental can be the same as 5 or 6 days! If you need the car twice within a week, just take it for the week.
- Fuel Discounts – When you hire your car, check out the keyring to see if it has a logo. Some rental agencies have agreements with specific petrol (gas) companies and showing this fob will get you money off your fill up and even food and drink at the petrol stations.
- Excess Waiver – It is almost always cheaper to get this separately and in advance on a site like Reduce My Excess. We have been doing this for years and it really stops the hard sell at the rental desk too.
- Credit Card – You may need to leave a hold on your credit card for the rental so make sure you have a card that doesn’t charge fees and that you won’t need to use for the rest of your expenses. Some may take a debit card but it will suck your available funds.

General Money Saving Tips for Iceland
13.) Tips for WiFi and Roaming
Iceland is part of the EU, so if you have EU roaming included in your data plan then you’ll have an easy time of it. If you don’t, however, consider investing in an eSim like those provided by Airalo. Finally, there is the option for Wi-Fi. Of course this is the cheapest option as it comes completely free. You will find Wi-Fi in most accommodations, plenty of tour buses, and even in the centre of Reykjavik.

14.) Bring A Good Travel Card
When you are travelling, it is always a good time to have a fee-free debit or credit card. This is especially true in a country like Iceland where a lot of transactions are completed by card.

15.) Visit Off Season
Iceland is an expensive destination year round but there are a few months where the price dips a little. Once the Christmas rush is over, the prices will drop. Visiting mid-Jan to mid-April (not including April) is cheaper. The summer months are popular but again, once the days start to darken and the temperature drops, so does the price. mid-September to mid-November is another time great to visit. Hooray for shoulder season!
16.) Make a Packing List
There are plenty of countries around the world where you can just pick up a few bits when you land. If you really intend to have a cheap holiday in Iceland, you don’t want to do that. Simple things like beauty products can cost double what you are used to. In order to save this additional cost, make an extensive packing list and go through it a few times. Don’t make the mistake I always make, and tick things off that intend to do in a second because that always leads to me forgetting something.
Enjoying Food and Drink in Iceland on a Budget
17.) Tips for Drinking Alcohol in Iceland
- Happy Hour – If you find yourself in Reykjavík in the late afternoon, it is time to get a drink. Iceland loves a happy hour. This is when you’ll find drinks at about the price you might expect in a London pub, which still isn’t cheap, but it is cheapER.
- Duty Free – The thing that makes alcohol in Iceland, so very expensive are the taxes. So, the absolute cheapest way to buy it is actually to buy it the second you land in Iceland. I have always been sceptical about duty-free alcohol, but the last time we passed through, we actually found some decently priced booze. Small bottles of Prosecco and similar sparkling wine We’re not much more than you’d find them in a British supermarket. Plus, they have a few bundle deals too.
- Al Fresco Drinking – Iceland has no outside drinking laws, which means if you are there when the weather is a little warmer, you can take those drinks from your duty-free shopping spree and sit out somewhere to enjoy them. This is particularly fun in the midnight sun. Bear in mind that Icelandic supermarkets can only sell alcohol up to 2.25% so you may not be able to grab a cheap beer in the same way as you are used to.



18.) Consider Self Catering
- Bring It With You – Everyone arriving into Iceland is entitled to bring 10kgs of food into the country. Of course there are restrictions on the kinds of food, especially from outside the EU so no fresh fruit and veg, no dairy or meat. You can bring your staples (noodles, rice, pasta and shelf-stable products). Rice and pasta isn’t too badly priced but it is still about double what it is in the UK. The best things to bring are olive oil, salt and pepper and all those things you’ll only need a little of. no need to buy an expensive, large version when you get to Iceland!
- Supermarkets – The most expensive food shop in Iceland is 10-11. They are smaller, right in town open late into the night. The convenience is tempting but they can cost up to 50% more than the cheaper shops. Plus, they put the price of their fresh cooked food up at night (cheeky). Instead look for the three budget-friendly supermarkets, Bonus (with the pig) and Kornan (with the yellow smiley face). Netto is a little more expensive, but still better than 10-11. Keep an eye on the prices as you shop as some items can be surprisingly pricy. For example, cheese, eggs and veggies can be alarmingly expensive. Remember to bring your own shopping bags as they charge for their own ones.
19.) Don’t Pay for Water
Tap water throughout Iceland is clean and delicious. You are perfectly fine to drink it straight from the tap without worry of getting a bad tummy. If you don’t like plain water, bring a little squash or similar to flavour it up.

20.) Tips for Eating Out
- Eat Out at Lunch – If you want to eat at a nice restaurant, make it a lunchtime treat. Many places have a cheaper set lunch menu so you can try the fine food at a slightly lower price.
- Have a Hot Dog – Iceland’s favourite fast food is the hot dog. The sausages are a combination of lamb and pork, braised in beer for a real umami hit. They are served with three special sauces and two different kinds of onion (raw and crispy)/
- Sip Some Soup – If you are in Reykjavik, check out Icelandic Street Food. They serve traditional lamb soup, simple broth with lamb and root veggies. They offer free refills so you can really go to town!
- Hit the Gas Stations – Some of the best value food on offer around Iceland can picked up in the petrol stations. These aren’t week old fridge sandwiches but rather, fresh cooked and good value dishes. Yes, there are hot dogs and chips but you can find good value baked pastries and more traditional Icelandic dishes too.





Final Thoughts for Travelling Iceland on a Budget
Sure, travelling to Iceland on a budget takes some discipline but with some planning and preparation it can be possible. This country is beautiful, dramatic and so much fun. I am sure we will be back for a forth, fifth and sixth cheap holiday to Iceland.
Rosie xx

















































































































































































































