Iceland: the land of sheep, northern lights, volcanoes with unpronounceable names (try Eyjafjallajökull), and crazy high prices. It’s supposedly one of the least budget-friendly countries in the world — which made visiting even more appealing to me. I always view expensive countries as a challenge. Figuring out how to visit an expensive country on the cheap is like solving a puzzle to me and I relished the challenge of finding out if visiting Iceland on a budget was possible.

And, after multiple visits to the country, I can tell you that traveling to Iceland can be done on a budget. It’s hard but not impossible to do.

Is Iceland expensive? Sure. The country is small, has a short growing season, doesn’t have a lot of crops, and has to import a lot of things it needs.

But, I’ve always found that the more expensive a place to live is, the more the locals work at finding ways to save money and beat the system. This holds true in every expensive country in the world outside of tax shelter countries like Monaco, Bermuda, or the Seychelles! Those places are just hopelessly expensive.

But, anyways, back to Iceland…

Can Iceland travel be expensive? Yes.

Can you beat the system and visit the country on a budget? FOR SURE!

You just need to be mindful of your spending.

How Much I Spent During My Last Visit to Iceland

While I was there, I spent an average of $54 USD per day (and I could have done it for less). Most of my money went to food and accommodation. Here’s a breakdown of my expenses (rounded to the nearest whole dollar) from my last visit which lasted close to ten days:

  • Food: $200 USD
  • Accommodations: $180 USD
  • Alcohol: $80 USD
  • Transportation: $95 USD
  • Activities: $39 USD

At $54 USD a day, I don’t feel like I missed out on anything. Sure, I wasn’t eating fancy meals at restaurants (though I did eat out a couple of times) and I certainly couldn’t pay for activities such as whale watching, guided glacier walks, or helicopter rides. And, while those would have been fun to do, I found enough free activities to fill my time.

Suggest Budgets for Iceland

How much does it cost to travel Iceland? Well, not as much as you think as you can see. On the low end, you could get by on 6,500–8,000 ISK ($60–$75 USD) a day. That budget includes using local transportation, staying in an Airbnb, a hostel, with Couchsurfers, or camping; taking limited tours; cooking most of your food (restaurant meals are really expensive); and limiting your drinking.

For around 10,000 ISK ($94 USD) per day, you could eat out, drink more, and take more organized tours and paid activities. At 17,500 ISK ($163 USD) a day, you could stay in a budget hotel and eat out for the majority of your meals. At 25,000 ISK ($234 USD) a day or more, you can do whatever you want!

Extreme budget travelers who plan on hitchhiking, cooking all their meals, Couchsurfing, or camping with their own gear can get away with spending around 4,300–5,400 ISK ($40–$50 USD) per day.

Accommodation
Food
Transportation
Attractions
Avg. Daily Cost
Backpacker
$29
$10
$28
$17
$60
Mid-Range
$107
$16
$60
$35
$163
Luxury
$166
$70
$100
$200
$400

How to Save Money in Iceland

There are many things in Iceland that will eat into your budget and, in the land of $2.50 USD bottles of water, it’s easy to unconsciously spend money. A beer here, water there, a snack there can add up quickly, and suddenly you’ll find you spent an unplanned $100 USD. You have to work to save money here and be conscious of where your money is going. Keep track of every penny! On my first trip, I got tea just about every day (I love tea) but, at $3.50 USD a pop, it was starting to add up so I had to stop.

However, Iceland is a place full of FREE natural beauty and wonder and there are many ways to save money in Iceland. Here are all ways to travel Iceland on a budget, lower your costs, avoid my spending mistakes, and have extra money for your dream adventure excursion:

Hitchhike — Iceland is one of the easiest and safest countries in the world for hitchhikers. You can find rides throughout the country. It’s especially easy in the southern part of Iceland. Though harder, it’s also not impossible to find a ride in the off-season or in the sparsely populated north. I hitchhiked in the Westfjords and it often took me an hour or more to find a ride. However, in the south, you’ll rarely wait more than 15-20 minutes.

One way to find rides is ask around in hostels — people are usually driving the main ring road (M1) that circles the country, and there are only two ways to go on that!

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