Iceland is definitely not one of those countries that springs to mind when thinking about affordable travel destinations. When you’re talking $10 for a beer, costs can soon mount up and before you know it you’ve spent your annual holiday budget on a single trip! However, there are plenty of ways you can travel Iceland on a budget and still have an awesome time.

We visited back in September for ten days and enjoyed everything from free activities like hiking to some more spendy days out whale watching and cruising to see the Northern lights. Here we’ll share our tips for how you can save some money exploring this amazing island.

Getting to Iceland on a Budget

One of the best things about Iceland is how accessible it is for budget travellers – with a wealth of cheap flights from across Europe and even the US. One way flights from London to Reykjavik are as little as £50 when booked in advance, with airlines including Wow Air, Icelandair, British Airways and Easyjet flying daily.

Just be sure to check those luggage allowances – we paid a little extra to take on a reasonable hand luggage sized case each and definitely needed the additional luggage with the winter clothes we took.

What’s the Cheapest Way To Get Around in Iceland?

There are a few options for transport in Iceland, most of which can be tailored to provide a budget friendly method of getting around.

The best way to see Iceland on a budget is to hire a cheap car and camp. However, this is not ideal outside of the summer months, even in September we only saw a couple of tents as we travelled around, so you’d need to be pretty hardcore to do this in the autumn and winter. It is cheap though, with car hire starting from around £400 for a week for car that should be able to handle those gravel road without too much difficulty.

We took a slightly more upmarket option and hired a campervan from Happy Campers. This was the perfect choice for us – allowing us to set our own itinerary and save money on food. However, even with a heater and several layers it was pretty chilly some nights and if you like your creature comforts it might not be quite right for you!

We paid around £1400 for 7 days, which included plenty of extra camping kit and pick up from our hostel in Reykjavik. Campsites tend to cost around £15 per night and the facilities were generally great.

If you’ve got a bit more money to spend then we met a lot of people who hired cars and stayed at hotels and guesthouses along the way. This will set you back around £100 a night on average plus your car hire cost, bearing in mind that some places are short on supply when it comes to budget accommodation.

Another thing to look into is coach tours, especially if you’re not spending too long in Iceland. It’s possible to base yourself in Reykjavik and do a few day tours to local popular spots from around £40 per day.

Budget Friendly Food & Drink in Iceland

One of the biggest costs in Iceland has to be food and drink. I already mentioned the crazy alcohol prices but food is also expensive, especially if you want to eat out a lot. We budgeted for one meal out, choosing to cook and eat snacks for the rest of our trip, and paid around £50 for two bowls of fish soup and a couple of coffees. Even though we knew to be prepared for the prices, we were still pretty shocked!

Our absolute top tip for eating and drinking in Iceland on a budget, especially if you’re camping, is to raid the ‘free food’ boxes where other travellers have left food that they didn’t manage to get through. We got really lucky on arrival to pick up our camper as they’d had a number of trips end the day before and had cupboards full of food. We managed to scavenge cereal, porridge, pasta, noodles and so much more which must have saved us a small fortune over the week. Another reason to travel in shoulder season when it’s not so busy!

Supermarkets are still pretty expensive, especially for meats and cheeses, but it’s possible to stock up on a couple of days worth of simple meals for around £40 using budget supermarkets like Bonus, Kronen and Netto.

Another top tip here is to plan ahead and make sure you have plenty of snacks handy. Supermarkets can be few and far between, so ensure you have these marked out on your route so you don’t end up having to visit more expensive stores.

What To Budget For Tours & Activities in Iceland

This is where we typically tend to splash out a bit more, and whilst we knew we’d be enjoying plenty of beautiful (free!) landscapes and hiking opportunities, we also knew there were a few things we didn’t want to miss.

So where to spend and where to save on your activities?

We chose to splurge on three main trips – Whale Watching, a Northern Lights cruise and a boat trip on the Jokulsarlon Glacier Lagoon. The rest of our adventures were either pretty cheap or free, with lots of time spent exploring stunning waterfalls and walking on the island’s famous black sand beaches.

These trips weren’t cheap – but we got a good deal for doing our whale watching and northern lights tours with the same company in Reykjavik. We used Elding and they were fantastic for both tours – the boats were in great condition, tour guides were super friendly and really well informed and best of all, they were totally flexible. We cancelled the tours on our first day as it was pouring with rain, and were able to reschedule on the day when we caught some luck with the weather later in the week.

On the day we visited Jokulsarlon we’d hoped to take one of the zodiak boat tours, which allow you to travel further out onto the lagoon but unfortunately these were sold out for the day. Instead we opted for the Amphibian tour where you kind of drive into the water and sail around, and to be honest, it was still fantastic. It’s like being in another world – surrounded by mist with icebergs rising up out of the lagoon and the occasional glimpse of a seal in the water.

All in all we paid £40 per person for the boat tour at Jokulsarlon, and around £150 each for a combined Northern Lights & Whale Watching tour.

We found any paid for activities were great value, but another awesome thing about Iceland is that the country’s most beautiful destinations and scenic landscapes are completely free to explore. I reckon you could quite easily travel the country seeing incredible places without spending anything at all once you’ve covered your travel, accommodation and food costs.

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