Iceland is known for its otherworldly landscapes, geothermal hot springs, and dramatic waterfalls. But it also has a reputation for being one of the most expensive destinations in the world. Fortunately, traveling to Iceland on a budget is entirely possible with careful planning and some insider knowledge. In this guide, we’ll explore actionable tips to help you experience Iceland’s magic without breaking the bank.
1. Travel During the Off-Season
Iceland’s peak tourist season runs from June to August, when the midnight sun draws visitors worldwide. However, traveling during the shoulder seasons (April-May and September-October) or winter months (November-March) can save you significantly on flights, accommodation, and tours. Plus, winter offers the added bonus of viewing the Northern Lights.
Pro Tip:
Keep an eye on budget airlines like PLAY Airlines or Wizz Air, which often have deals for transatlantic flights to Iceland.
2. Leverage Stopover Programs
Many airlines, including Icelandair, offer free stopovers in Iceland for up to seven days on transatlantic flights. This can be an excellent way to explore the country without paying for a dedicated trip.
How Stopover Programs Work
Stopover programs are designed to encourage travelers to spend time in Iceland en route to another destination. Instead of just changing planes, you can break up your journey with a short stay in Iceland at no additional airfare cost. These programs often allow you to:
Book your stopover directly while purchasing your transatlantic ticket.
Choose from a stopover duration of 1 to 7 days.
Access exclusive deals on accommodation and activities through the airline’s partners.
Pro Tip:
Check out PLAY Airlines revamped stopover program, which offers similar perks, and monitor their deals for affordable travel packages.
3. Opt for Budget Accommodation
While hotels in Iceland can be pricey, there are affordable alternatives:
Hostels: Stay at budget-friendly options like KEX Hostel in Reykjavík or HI Hostels, which have multiple locations across the country.
Guesthouses: Family-run guesthouses often include breakfast, saving you money on meals.
Camping: During summer, camping is an economical and scenic way to stay. You can rent gear or consider a campervan for both transportation and accommodation.
Pro Tip:
Purchase the Campingcard, which provides access to over 40 campsites around Iceland for a flat fee.
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4. Save on Transportation
Iceland’s public transportation options are limited, so most travelers rent a car. Here’s how to save:
Carpooling: Join Facebook groups like “Iceland Travel Buddies” to find travelers to share car rental costs.
2WD Rentals: If you’re sticking to the Ring Road and avoiding highland routes (F-roads), a 2WD car is sufficient and cheaper than a 4WD.
Discount Rental Companies: Check out budget-friendly agencies like SadCars or Go Car Rental Iceland.
Alternative:
For those on a tight budget, consider guided bus tours or long-distance buses like Stræto.
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5. Shop Smart for Food
Eating out in Iceland can drain your wallet quickly. Instead:
Supermarkets: Shop at budget grocery stores like Bónus, Krónan, or Nettó.
Cook Your Meals: Opt for accommodations with a kitchenette to prepare your meals.
Pack Snacks: Bring energy bars, dried fruits, and nuts from home to avoid overpriced convenience store items.
Pro Tip:
Try the hot dog stands, like the famous Bæjarins Beztu Pylsur, for a cheap and iconic Icelandic meal.
6. Maximize Free Activities
Many of Iceland’s top attractions are natural wonders that cost nothing to visit:
Waterfalls: Explore breathtaking waterfalls like Seljalandsfoss, Skógafoss, and Gulfoss.
Geothermal Areas: Visit sites like Geysir and the bubbling mud pools at Hverir.
National Parks: Hike through Þingvellir, Vatnajökull, and Snæfellsjökull National Parks.
Beaches: Don’t miss the black sand beaches at Reynisfjara.
Pro Tip:
Download the Wapp Walking App for free self-guided hiking routes in Iceland.
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7. Take Advantage of Free Hot Springs
While the Blue Lagoon is world-famous, its entry fee is steep. Instead, consider these free or low-cost alternatives:
Seljavallalaug Pool: One of Iceland's oldest swimming pools, Seljavallalaug is nestled in a remote valley surrounded by mountains. Access is free, though the pool’s amenities are minimal.
Reykjadalur Hot Springs: Just a 45-minute drive from Reykjavík, Reykjadalur offers a scenic hike through geothermal areas to a hot river where you can soak for free.
Landbrotalaug Hot Spring: A small, natural pool located on the Snæfellsnes Peninsula. It’s a hidden gem that offers an intimate and peaceful experience.
Krossneslaug Pool: Found in the remote Westfjords, this seaside hot pool offers stunning views of the ocean and mountains. Entry is inexpensive compared to major spas.
Secret Lagoon: Less crowded and more affordable than the Blue Lagoon.
Pro Tips:
Arrive Early: Popular hot springs like Reykjadalur can get crowded. Visiting early in the morning or late in the evening ensures a more tranquil experience.
Bring Essentials: Pack a towel, swimsuit, and flip-flops for convenience. A dry bag can also keep your belongings safe.
Respect Nature: Follow Leave No Trace principles to protect these natural sites for future visitors.
Use Local Resources: Websites like Hotpot Iceland or apps such as Hot Spring Hunt can help you discover hidden gems.
8. Pack Smart for the Weather
Iceland’s weather is unpredictable, and buying gear locally can be costly. Pack these essentials before you go:
Waterproof jacket and pants
Layers for warmth
Sturdy hiking boots
A reusable water bottle (Iceland’s tap water is among the cleanest in the world
Pro Tip:
Check out secondhand shops like Red Cross Thrift Store in Reykjavík for affordable outdoor gear.
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9. Save on Tours
Tours for glacier hikes, whale watching, and other adventures can be expensive. Here’s how to cut costs:
Self-Guided Adventures: Many attractions, such as waterfalls and national parks, are accessible without a guide. Plan ahead by researching free online resources and maps.
Combo Tours: Look for packages that bundle multiple activities, like the Golden Circle and Northern Lights, often at a discounted price.
Local Guides: Smaller operators listed on platforms like Guide to Iceland often offer more affordable and intimate experiences compared to large tour companies.
Pro Tips:
Book tours during sales or off-season promotions.
Join travel forums or Facebook groups to find discounts and recommendations for trustworthy, budget-friendly tour operators.
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10. Use Discount Cards
Investing in discount cards can yield significant savings:
Reykjavík City Card: Provides free entry to museums, thermal pools, and public transportation in Reykjavík. Perfect for city travelers aiming to explore multiple attractions.
Icelandic Krona Card: Available at select gas stations and accommodations, these preloaded cards often come with discounts on fuel and stays.
Pro Tip:
Check the official Reykjavík tourist website for seasonal promotions on city cards or extra benefits during festivals and events.
11. Stay Connected Without Overspending
Avoid international roaming fees by:
SIM Cards: Purchase local SIM cards from providers like Siminn or Vodafone, which offer affordable data packages. These are readily available at the airport and major towns.
Free Wi-Fi: Iceland is well-connected, with free Wi-Fi available at most cafes, restaurants, and hotels. Even some rural gas stations provide Wi-Fi access.
Pro Tip:
Download offline maps using Google Maps or Maps.me before arriving in Iceland to save on data usage.
12. Be Strategic with Currency Exchange
Avoid unnecessary fees when managing your money in Iceland:
Use Credit Cards: Cards are widely accepted across the country, even for small purchases. Opt for a card that doesn’t charge foreign transaction fees.
Minimize Cash Withdrawals: Iceland is largely cashless, so there’s rarely a need to carry significant amounts of cash. When necessary, withdraw from ATMs attached to banks for better exchange rates.
Check Exchange Rates: Use apps like XE Currency to monitor real-time rates and ensure you’re getting the best deal.
Pro Tip:
If paying with a card, always choose to pay in the local currency (ISK) instead of your home currency to avoid unfavorable exchange rates.
Final Thoughts
Traveling to Iceland on a budget requires planning, but it’s well worth the effort. By visiting during the off-season, leveraging free attractions, and making smart choices for food, transportation, and accommodation, you can enjoy this incredible destination without overspending. Happy travels!
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