Budget Travel in Iceland – Planning A Trip To Iceland On A Budget

We love Iceland. We love it to bits. Yes, we admit that it has a reputation as expensive, and yes, that scares lots of people away. But it shouldn’t. We let it scare us away for a while, but once we eventually did visit we were kicking ourselves for not discovering this incredible country sooner.

Planning a Trip to Iceland on a Budget

The moral of the story? Iceland isn’t that expensive if you don’t want it to be. Yes, Iceland is more expensive than some places in Asia, but you shouldn’t let that stop you from planning a trip to Iceland. The guide will help you understand where your budget will go, where you can save money, and how much you should plan to spend.

Getting to Iceland

Many people think that Iceland will be expensive to get to because it is so isolated. But in fact, it isn’t as isolated as you think it is. Flights from Toronto to Reykjavik only take 4 hours, and flights from London to the Icelandic capitol only take two hours. In fact, Iceland Air flies between pretty much every major North American city, and every major European city – and pretty much all of their flights have the option for a stop over in Iceland. Sometimes they even run promotions where the stop over is at no additional cost. So there really is no excuse not to hop off and experience Iceland for a week or two.

Budget tip: Keep an eye out for promotions on Iceland air where the stop over in Iceland between a European and a North American destination is free.

When to Visit Iceland

Summer is the main time that most people plan a trip to Iceland. This is the season when all the roads are open, driving is easier, and you can save money by camping more often. However, if you are instead planning a trip to Iceland in the winter, you will get to take advantage of more flight and accommodation deals. There are pros and cons to either season. We visited Iceland in the winter and thought that the cold and the snow gave it an even greater degree of natural beauty.

Read more: Travel to Iceland in the winter

Read more: Travel to Iceland in the summer

Getting around Iceland

The best way to see Iceland is with your own transport. The ring road is a good quality sealed road that encircles the country. This road is passable by 2 wheel drives, and is in good condition almost all of the year.

Read more: A Golden Circle road trip

Read more: Driving the south coast of Iceland

Read more: A driving tour of Iceland’s south west

Renting a car in Iceland doesn’t have to be that expensive either. We rented a medium size car with a baby car seat for a week for about 200 euros. We used the ultra budget and local car agency SADcars, but others we met had rented from larger chain rental agencies such at Sixt for about the same price point as us. It pays to shop around. Note that if you rent from SADcars, the car you get will be older, not so pretty, and very basic. This means they do not come with studded tires. We assumed this would be fine for us even though we were visiting in the winter since we planned to only stick to major roads. However we still had a few scary moments. We recommend getting studded tires if you are traveling during the winter in Iceland.

Read more: Driving in Iceland (video)


Accommodation in Iceland

We found accommodation rates in Iceland to actually be cheaper than in Australia or Canada… and certainly cheaper than London. And not only were the prices reasonable, but the rooms were all very high quality. Many rooms included breakfast, and they were all incredibly spacious, warm and cozy.

We had less accommodation options available to us in the winter when we visited, as many guesthouses only operate in the summer. If you visit in summer, you also have the benefit of having the option to camp. Camping in Iceland would be amazing. Yes the weather is unpredictable, but just imagine waking up to a stunning Icelandic landscape like this every morning.

icelandic shed

Food in Iceland

Considering Iceland’s reputation for being super expensive, I was not expecting to be able to eat out that often. And yes, the cost of eating out is a bit steep – but when compared to other expensive countries, like Australia – it actually seemed rather reasonable. We didn’t eat out of a lot, but when we did we were always pleasantly surprised by the quality of the food.

It is super easy to self cater in Iceland as well. But be aware that once you leave the major towns the selection at the supermarkets drop dramatically. We recommend stocking up in Reykjavik and self catering as much as possible. If you are road tripping, then plan to make your own lunches on the go. All of the guest houses we stayed in had communal cooking facilities, so we rarely needed to eat out.

Activities in Iceland

The cost of “doing stuff” can be pretty high in Iceland, like the Blue Lagoon for example. But luckily, most of the “stuff to do” in Iceland is checking out incredible natural features like the Glacier Lagoon or Geyser… and natural attractions are always free.

However if you are like me and do not have a driving license, but you still are planning a trip to Iceland, then you will need to factor in the cost of tours to your budget. Tours can be more expensive than a DIY road trip, but you will gain a greater degree of local insight as well as get the opportunity to meet other travelers.

Read more: 17 Icelandic Tours that are worth the cost

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16 thoughts on “Budget Travel in Iceland – Planning A Trip To Iceland On A Budget

  1. Ahh I’ve always wanted to get to Iceland! I am hoping to get there soon, but it’s very difficult to get there from Korea.. Thanks for sharing!


  2. Ahh I’ve always wanted to get to Iceland! I am hoping to get there soon, but it’s very difficult to get there from Korea.. Thanks for sharing!!


  3. Prices in Iceland can add up real quick; however, I have found that getting there can be done quite economically via Icelandic Express or other airlines.


    1. Yeah, getting there was super easy. We went as a stop over between London and Toronto. And we actually found it cheaper than traveling in Canada or Australia


  4. Isn’t Iceland just amazing! I was there this past March and took the 4 hour journey from Toronto. I was amazed by how fast I got there. But to chime in on the expensive part that I kept hearing, I to did not find it that bad with the exception of a few small things. Accommodation was quite cheap and doing things was not bad if you were able to get your own transportation (SADcars). Though I heard that in the winter it is much cheaper than the summer. I was told the best time to go to Iceland is in the winter as it is drastically cheaper.


  5. Great!The blog is good.Thanks for sharing your pictures Jade…I will look forward to go there soon. In Iceland has incredible natural features… and natural attractions.


  6. Nice to know there is such a thing as budget travel in Iceland 🙂 I’m desperate to get there as have only heard good things from people who visit. Plus, being such a liberal country with a huge penchant for protecting civil rights, it’s always interested me. Hopefully next year.


  7. This is rad, thank you for the guide! I’ve been aching to hit up Iceland but it’s always had the stigma of being uber expensive. I’ll need to reconsider this for my next trip!


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