Iceland on a Budget (Yes it's Possible!)

Some countries around the world are renowned for being an expensive travel destination. And Iceland is definitely one of them. But today, I’m answering the question on everyone's mind interested in exploring this magnificent country – Iceland on a budget, is it possible?

It’s always possible to cut some costs and save some dosh. You just need to know where to skimp. The majority of the attractions in Iceland are free – they’re out of the cities in nature, which is a big bonus. But considering Iceland's seclusion, small tourism industry and the distance between sights – it can all add up.

Here are my tips to save some money while travelling around Iceland.

Rent a car

There’s no way you’re going to get to explore as far and wide as you should in Iceland, without your own car. You could go on a tour or catch buses (I wouldn't recommend this) but a car gives you freedom to do what you want, when you want.

Car rental starts at AU$35/day (without insurance) – try SADCARS. Or for a camper, try Camper Iceland.

It's recommended to get, at the very least, gravel insurance. You never know when you'll find yourself on a gravel road in Iceland. Get covered so you don't have to pay hefty fees at the end of your trip for some unavoidable damage.

Stock up on supermarket food

This would be my biggest savings tip because it can work for absolutely anyone – no matter your style of travel. Save some money by eating your own food. Make sure you stop off at the local supermarket in the larger towns. But the further you are from Reykjavik, the smaller the towns and the more expensive the food. So get as much as you can in Reykjavik before your big adventure.

For all those Australians out there, it's a great idea to take a tube of Vegemite. All you need is bread, butter and some cheese slices and you've got yourself breakfast and lunch!

Although exploring a culture is also about trying the local food, you're not missing much in Iceland outside of the major cities.

Refill water bottles

Water doesn't get any fresher than in Iceland. As a water lover, I was in heaven drinking from the tap. So either bring your own water bottle or buy one from the supermarket and enjoy the convenience of delicious, fresh tap water.

Stay in hostels

Outside of Reykjavik, a hostel isn't what it seems. They're actually similar to a bed and breakfast, only you get no breakfast. Here you can rent a room, not a bed, and you have free range of an old house with a communal lounge and kitchen. It's convenient if you're travelling with a buddy or two, but pricey if you're travelling solo.


If you’re in Iceland in the warmer months, camping can be really cost effective. You can pick up a tent from some car rental places for $10/day. Some car rental companies will have tents for hire, or try Iceland Camping Equipment. You can save even more money by pitching your tent anywhere – as long as there's not a sign telling you otherwise. If you want toilets and a shower, then you'll get away with paying about AU$15 a night for a campsite.

Don’t try camping during winter. And as tempting as it is to save some money, don’t sleep in your car during winter. The temperatures drop far too low to risk. All that warm air you breath out at night will fog up the car for the remainder of the day, which makes driving, very difficult and dangerous.

Couchsurf or work for it

If you’re really tight on money, you could couchsurf or work for your board. This way you get to meet locals, learn how they live and be part of the culture. Although Icelandic people come off quite reserved, they're actually really lovely, warm, welcoming people.

With these budgeting tips, you'll be enjoying Iceland's otherworldly landscapes in no time! It's a country unlike any other – it's an absolute must! And now nothing is holding you back. Just do it, book book book.


What are your top budgeting travel tips?


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Iceland on a budget