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Iceland On A Budget: 5 Things You’re Forgetting To Save For

If you are heading to Iceland on a budget, there are some things you may be forgetting to include!  Creating an Iceland budget and saving accordingly is crucial to enjoying your time in the country without breaking the bank. That being said, even the most well-planned budgets have the potential to be blown when visiting one of the most expensive countries on the planet. When you travel, you open yourself up for running into potential extra and unexpected costs that can really drive up your Iceland budget. We have visited Iceland on a budget every trip and it is easy to do if you adhere to budget Iceland travel tips.

Whether you are driving yourself, taking one of the many fantastic tours in Iceland, or just stopping over for a few hours, you should consider all costs. Planning for the unexpected will make running into a potential extra cost less daunting as you will have already set aside a bit of money in the event that you come across the need to use it. If you intend to visit Iceland on a budget, make sure to account for these unexpected trip to Iceland costs in your savings plan.

As a bonus, we have added quick tips for visiting Iceland on a budget after our list of 5 things you are forgetting to save for! By the end of this post, you will be a pro at cutting down on your Iceland budget!

see godafoss in iceland on a budget

Iceland On A Budget: 5 Things You’re Forgetting To Save For

#1 Remember To Factor In Gas If You Are Hoping To Travel To Iceland On A Budget

Gas is expensive as all get out in Iceland but it is a necessary evil if you plan on renting a car and going on an epic road trip. When we mean expensive, we mean, double or triple the price you are used to paying, especially for Americans. Unfortunately, if you plan on driving in Iceland, there is no way to get around the super high cost of gas in Iceland. If you are hoping to see Iceland on a budget, make sure you save up for gas!

Gas is running Americans around $6.50-$7.50 USD a gallon which is exorbitant and should be factored into your trip cost if you hope to visit Iceland on a budget. Iceland requires a ton of driving to get to all the epic sights and it generally costs a minimum of $70-$80 to fill up a vehicle that is very good on gas. Make sure to leave plenty of cushion in your budget for gas in Iceland because you are going to need it if you are hoping to visit Iceland on a budget.

You may have a general idea that gas is going to cost a pretty penny, but Iceland is quite a large country and requires a ton of driving. You will drive more than you are anticipating. Driving requires gas which requires money. Go into your trip understanding that you can visit Iceland on a budget but that gas is a place that you will be forced to spend some money. Save wisely, friends!

#2 Don’t Forget To Add Tolls To Your Budget Iceland Trip Cost

If you are heading to west Iceland, you are going to get hit with a $10 toll to go through an underwater tunnel [way more boring than it sounds]. The tunnel is actually quite long so it is understandable that there will be a toll to go along with it. If you plan to head back to Reykjavik, you are going to have to pay that $10 again. If you are truly looking to visit Iceland on a budget, you can go around this underwater tunnel and drive around the lagoon that it crosses under, but it will add a few hours to your travel time. We opted to drive the tunnel and it truly did save some time.

While this amount may seem insignificant now, you aren’t going to want to be surprised with tolls during your trip to Iceland on a budget without setting aside appropriate funds for this unsuspecting trip cost. A $20 round-trip toll isn’t something you hear about in Iceland so make sure to save for this unexpected cost if you are planning to visit Iceland on a budget. The cost of travel in Iceland is already high, so knowing about this toll ahead of time will save you slight annoyance when you are in the country!

Update: Some Tolls In Iceland Have Been Taken Away (2019)

Iceland On A Budget: 5 Things You Forgot To Save For | Tips For Visiting Iceland On A Budget | Budget Travel To Iceland | Cheap Travel To Iceland | Iceland Travel Tips | Follow Me Away Travel Blog | Iceland Travel Tips

#3 You Are Going To Want To Save Some Money For Snacks

First off, don’t you dare go out to eat if you ever hope to visit Iceland on a budget. Going out to eat is an unnecessary expense but snacks are a different story. Your trip to Iceland on a budget will most likely include lots of driving, so having food at your disposal is necessary. If you are in a pinch, pick up a snack such as a bag of chips or granola bar at a gas station.

While buying a snack at one of the gas stations in Iceland will still be more expensive than you are used to, it is much cheaper than buying a full blown meal. Forgoing a full meal purchased on-the-go will save you lots of money if you want to travel Iceland on a budget. Food is one of the most expensive costs of travel in Iceland but buying snacks and cooking dinner yourself is a great way to save!

If you think ahead, go to one of the many affordable grocery stores in Iceland and pick up nonperishable snacks in advance. Our favorites: popcorn, chips, Doritos, oranges, and apples. Having snacks at the ready will curb your hunger and will help reduce the cost of your trip if you aim to travel Iceland on a budget! In addition to snacks, we recommend bringing some easy-to-make lunch staples such as peanut butter and jelly and bread in the car with you so you don’t have to spend a lot of money to eat at a gas station or local restaurant.

Iceland On A Budget: 5 Things You're Forgetting To Save For

#4 Parking Is Another Unexpected Cost To Consider When Traveling Iceland On A Budget

We always strive to visit Iceland on a budget and parking was a totally unexpected cost for us, especially since we were staying at a 5-star hotel in Reykjavik. Turns out, the Icelandic government doesn’t discriminate and guests staying [and parking] downtown all must pay for city parking.We thought this was a very odd Iceland trip cost because many hotels have included parking if you are staying with them. We usually visit Iceland on a budget but were working which is why we found ourselves at one of the more expensive hotels in town, but we were still hit with the cost of parking which we did not plan for!

Parking in Zone 1 [on main streets] is the most expensive, but prices go down a bit if you park in other zones and on side streets. We parked in a Zone 2 and ended up paying around $15+ per day which was a cost we didn’t include in our Iceland budget. If you are hoping to visit Iceland on a budget, simply consider the potential for paying for parking or get outside of the capital where you won’t have to pay as much or anything at all.

Iceland On A Budget: 5 Things You're Forgetting To Save For

#5 Save Your Pennies For Using The Restroom

Yep, you heard that right. At many places in Iceland, it costs money to use the bathroom. You are going to want to factor this into your Iceland trip cost and have some change on hand in case you come across a facility that charges you. If you plan on visiting Iceland on a budget, do your best to stay away from bathrooms that charge you because every little bit counts.

Many locally owned gas stations will charge a couple hundred Kronor and while it is totally possible to run out without paying, it isn’t the best behavior for a guest visiting Iceland. You may also run into bathrooms that charge at heavily trafficked areas such as Gullfoss. Check out our tips on where to find free bathrooms at Gullfoss if you are visiting Iceland on a budget. Pro tip: when visiting Iceland on a budget, visit chain gas stations such as N1 or grocery stores such as Bonus for clean and free toilets.

Iceland On A Budget: 5 Things You're Forgetting To Save For

How To Get Around Iceland On A Budget

There are two main ways to get around Iceland on a budget. The first is renting your own car and driving yourself. If you aim to visit Iceland on a budget, your best bet will be to rent a manual 2×2 car. 2×2 vehicles are much more affordable than 4×4 cars and you are able to take them all around the entire Ring Road and to many major sites in Iceland with no problem.

You can also drive a 2×2 during the winter, just drive slowly and carefully. If you want to visit Iceland on a budget but have a little flexibility, you can get a 4×4 if you want but it isn’t necessary. That being said, if you want to split the cost of visiting Iceland with friends, a larger car may be necessary to accommodate for all your belongings.

If you are truly looking to visit Iceland on a budget, you can also consider hitchhiking as a way to get around the country. Believe it or not, hitchhiking is a popular way to get around Iceland and is completely free. Since Iceland is such a safe country, people feel comfortable hitchhiking and also picking up hitchhikers. The downside is that weather in Iceland can change on a dime and you may be stuck outside trying to find a ride in the worst weather Iceland has to offer. If you want to consider hitchhiking so you can visit Iceland on a budget, we highly suggest you do your research ahead of time so you know what you are getting into.

Finally, camping is another great way to get around Iceland on a budget. Renting a campervan will allow you the freedom of a car and lodging in one. Campervan rentals in Iceland generally start around $80 USD for a small vehicle which isn’t all that bad when you factor in the cost of lodging and car rental on its own. This is a very affordable way to get around Iceland on a budget and is a popular option for many people planning their trips to the country.

Driving is a popular way to get around Iceland on a budget

How To Get To Iceland On A Budget

Believe it or not, getting to Iceland on a budget has never been easier! Icelandair runs FREE stopovers on all of their routes which means you can pay for your flight and stay in Iceland for up to 7 days for free! If you plan on flying to Iceland on a budget from Europe, there are other affordable airline carriers that fly to Iceland such as Wizz Air and Easyjet. Make sure to keep an eye on prices as all of these airlines run sales from time to time and certain days of the week are also cheaper to fly in as well!

When you fly into Iceland, you will not land in Reykjavik, you will land in Keflavik Airport. Keflavik Airport is actually 45 minutes away from Reykjavik which comes as a surprise to many first-time visitors to Iceland. If you are looking to visit Iceland on a budget, consider renting a car with a free shuttle or on airport property. If you rent a car in Reykjavik, you may have to take a shuttle. If you aren’t renting a car, there is an affordable Keflavik>Reykjavik transfer bus and it is best to prebook online, although you can book upon arrival at the airport as well.

How to get to Iceland on a budget and what airlines to fly like WOW air or Wizz air

How To Pack For Iceland On A Budget

Even if you are planning to visit Iceland on a budget, we highly recommend packing properly for the trip. If there is one area you are going to splurge, this is it! You are going to want warm, windproof, and waterproof clothing and shoes when visiting Iceland, even on a budget. We have seen too many people walking around Iceland in Converse or sneakers and a light hoodie, freezing their behinds off with cold feet. You don’t want this to be you!

If you are truly looking to visit Iceland on a budget and really don’t have room to spend tons of money on good winter gear, don’t worry! Purchase a pair of waterproof rain boots from your local clothing store or from online. You can find rain boots for around $20. Wear a pair of wool socks or maybe even two and your feet will be dry on a budget! We highly recommend wearing rain boots to Iceland and we have on multiple trips with no issue.

When shopping for Iceland on a budget, check your local thrift stores or second-hand shops for a good winter jacket. You should be able to find one on the cheap, and even if it may not be in your color or style, at least you will be warm and that is all that matters! Even better, put a call out on social media to see if any of your friends or family members have winter gear that you can borrow for your trip! This way, you don’t have to spend any money and can still visit Iceland on a budget while staying warm and dry!

What to pack when visiting Iceland on a budget | budget packing list for Iceland | couples photos in Iceland

Where To Stay When Visiting Iceland On A Budget

You have three main options if you are searching for where to stay in Iceland on a budget. The first is to try camping! Camping in Iceland is quite popular and a wonderful way to explore Iceland on a budget. You can try renting a campervan or you can rent a 2×2 car and camp in a tent all around the Ring Road. Campgrounds in Iceland are very affordable and camping in Iceland is quite popular for those serious about traveling Iceland on a budget.

Second, you can choose to stay in a hostel which is another popular way to visit Iceland on a budget. There are many hostels located all around Iceland, from popular locations such as Reykjavik and Vik, to far flung destinations such as the Westfjords. You can choose hostels in Iceland based on your budget, and some offer private rooms, 6 beds, 12 beds, and gendered or co-ed rooms. Hostels in Iceland are a safe alternative to camping and a good way to visit Iceland on a budget.

Finally, if you are looking to save money in Iceland, we highly recommend considering Airbnbs in Iceland. The cost of an Airbnb is often the same or cheaper than a hostel in Iceland and is a wonderful way to visit Iceland on a budget. Having an Airbnb in Iceland allows you to shop for groceries and cook your own meals, which you may not have access to if you choose traditional accommodation such as a hotel. Do your research on Airbnb and make sure to put your maximum budget into narrow down exactly what you are looking to spend. Airbnb is our favorite way to go when visiting Iceland on a budget and we can’t recommend it enough!

Stay in an Airbnb when looking to travel Iceland on a budget

Quick Tips For Visiting Iceland On A Budget

If You Truly Want To Visit Iceland On A Budget, Visit During The Winter Or Off-Season

Not surprisingly, the summer is the most expensive time to visit Iceland as the price of almost everything is higher than normal. If you are aiming to travel to Iceland on a budget, consider visiting during the winter or during the shoulder season [months such as April or September]. These times are the best time to go to Iceland if you want to visit Iceland on a budget because costs are lower but all the fantastic and memorable sites are still right there waiting for you!

By visiting Iceland during the off-season, you are getting a more private experience at each location won’t be overrun with other tourists and you will spend less time and money fighting for precious hotel space and car rentals. We have visited Iceland on a budget during both the off-season and winter and we promise that the experience is just as magical!

Iceland On A Budget: 5 Things You're Forgetting To Save For

Do Not Ever Go Out To Eat

We have said this before and we will say this again; if you are serious about visiting Iceland on a budget, it is imperative that you do not go out to eat! Going out to eat in Iceland will blow your budget for Iceland really quickly and it is unnecessary. Go into your trip to Iceland with the mindset that this is more of a nature trip rather than a foodie trip [unless you have hundreds of dollars to blow!] Eating out in Iceland can easily cost $50 per person for a simple burger and a lunch of gas station hot dogs will be $18-$20 per person.

If you do the math, you will see that eating out and visiting Iceland on a budget do not go hand in hand. So what do you do instead? If you want to save and experience local life, head to one of the supermarkets in Iceland, as mentioned above. Here, you can purchase a variety of more affordable lunch and dinner options ranging from frozen pizzas, canned soup, pasta and sauce, fresh fruits and veggies, meats and more.

Visiting Iceland on a budget means stocking up on food staples at grocery stores and then cooking yourself. The best part about going to grocery stores in Iceland is that you are really getting a peek into the everyday life that you wouldn’t have gotten by doing out to dinner.

Iceland On A Budget: 5 Things You're Forgetting To Save For

Forgo The 4×4 Vehicle And Stick With Renting A 2×2 Car If You Want To Visit Iceland On A Budget

If you want to rent a 4×4 all-wheel-drive vehicle and you have saved the money for it, go right ahead! If you are like the rest of us who are already in sticker shock at the price of going to Iceland, opt for a 2×2 vehicle. No matter what time of year you are trying to visit Iceland on a budget, from the dead of winter to the height of summer, a 2×2 car will do just fine.

Unless you are going to visit the Highlands of Iceland or drive on any roads marked with an H or F, you will have absolutely no need for an expensive 4×4 vehicle. Not only do 4×4 vehicles cost more to rent, they also suck up gas much quicker and are more expensive to fill than a budget 2×2 car.

We have only rented a 2×2 during our trips to Iceland, including one in the dead of winter with lots of snow. Roads in Iceland are well-kept, so you don’t have to worry about getting stuck. If you are planning to drive the Ring Road or even just head to the south of Iceland or drive the Golden Circle, you will not need anything more than a 2×2 vehicle. This is a huge and unnecessary cost to cut if you want to visit Iceland on a budget.

tips for visiting Iceland on a budget

Avoid Drinking Alchohol If You Don’t Want To Blow Your Iceland Budget

Alchohol in Iceland carries a tax of 84% and the state has a monopoly on alcohol productions and sales. This makes buying and consuming alcohol in Iceland extremely cost prohibitive. Our best advice to you if you truly want to visit Iceland on a budget to is simply avoid drinking alcohol, especially in bars, unless you want to spend a pretty penny. One bottle of beer at a store can cost $5-$6USD and the price just goes up when you get to a bar. This is for a simple beer and doesn’t even consider the cost of hard liquor.

If you truly cannot survive your trip to Iceland on a budget without a drink now and again, buy your liquor from the duty-free store in the Keflavik Airport and grab some mixers at the grocery store and create your own drinks. Of course, never drink and drive, but indulging at your lodging is perfectly okay and a little cheaper than purchasing alcohol on the go or at a bar. Either way, if you feel like you are going to want liquor, make sure there is room in your Iceland budget for this splurge.

Iceland On A Budget: 5 Things You're Forgetting To Save For

Stay In An Airbnb Or Go Camping In Iceland Instead Of Choosing A Hostel Or Hotel

There is a common misconception that hostels are cheaper than staying in an Airbnb. You have to do a little research to find the right Airbnb, but the platform is easy to manage and you will most likely enjoy staying in an Airbnb more than a hostel. If you are looking to travel Iceland on a budget, consider the following comparison.

Let’s pretend that a hostel in Iceland costs $35 per person per night for a dorm of 6-8 people. That is $70 per night and you are sharing sleeping and living quarters with lots of others. Now, a nice shared Airbnb [maybe even an entire home!] in Iceland may cost as low as $50-$55 per night for two people. You will get your own private room and may have to share the restroom with less than a handful of other people. If you want to visit Iceland on a budget and aim to grocery shop and cook your own food, Airbnbs allow you to have access to a fully equipped kitchen and dining area where you can make and store your food.

Hotels do not offer any cooking space so you will be forced to go out to eat and spend a ton of money, on top of the money you already spent booking the hotel. If you are serious about traveling Iceland on a budget, you could also consider camping in Iceland. Many people choose to rent a campervan, but if you want to save even more you can choose to tent camp. Tent camping in Iceland is doable but not for the faint of heart. Campsites in Iceland are affordable and you can buy a camping card that gives you access to a variety around the island.

shave our iceland budget by staying at an airbnb

Go With Someone Else So You Can Split The Cost

If you can, plan your trip to Iceland on a budget with a friend, significant other, or family member. Even better? Get a group of people to travel with for max fun and minimal spending. We will never discourage people from solo traveling to Iceland and it is quite affordable, but going in a group will obviously cut costs because you will be able to split the bill with other travelers.

We recommend choosing to go to Iceland on a budget with an even amount of people, so you aren’t stuck booking an extra bedroom or campervan or whatever for one extra person. Of course, if your group indeed is uneven, consider this when figuring out your Iceland budget. Going to Iceland with someone else or with a group will give you someone to split the cost of the car rental, accommodations, food, gas, and more with.

Iceland On A Budget: 5 Things You're Forgetting To Save For

Bring Your Own Reusable Water Bottle And Save The Earth [And Money!]

The tap water in Iceland is some of the purest and most delicious water in the world. It is fresh and clean straight from the ground so you are good to drink it! Hot water in Iceland comes from the volcanic nature of the island and is heated underground and it is not recommended to drink hot water as sulfur is present.

Since the water in Iceland is so clean and delicious, save yourself money and pack a reusable water bottle so you can just fill up at a nearby sink when necessary. We always recommend purchasing a water bottle with a filter, just in case, and we love our Bobble Water Bottles. They are affordable and have saved us on numerous occasions. Like everything else, purchasing bottled water in Iceland can cost a lot of money and it is completely pointless when the tap water is so safe and tasty. Pack your own water bottle and you are one step closer to visiting Iceland on a budget.

Iceland On A Budget: 5 Things You're Forgetting To Save For

Additional Reading For Your Trip To Iceland On A Budget

What is your favorite pro-tip for visiting Iceland on a budget? Did you experience anything we mentioned during your trip? Were there any additional expenses that made your Iceland trip cost add up? Let us know in the comments! 

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36 thoughts on “Iceland On A Budget: 5 Things You’re Forgetting To Save For

  1. Amy

    When I was putting together our budget for Iceland earlier this year, I accounted for gas and snacks (buying groceries etc) but none of the other things! Thanks for letting us know – will bookmark this for when I look at making definite plans to visit!

    1. Follow Me Away Post author

      Whatever you account for gas, account for more! It is pretty expensive, at least for Americans who are used to gallons 😉 Let us know if you ever want to chat about the trip! Excited for you 🙂

      1. Lisa

        I would love to know more. How expensive is it? Can we do it in 10 days? Is it worth it to rent a car? Better doing tours? There seems to be a lot to visit. I wouldn’t even know where to start. Can you help me?

        1. Follow Me Away Post author

          Hello! We highly recommend renting a car and driving yourself unless you prefer tours! Everything can be done on your own and a lot is easily accessible from the road! 10 days is not too much and what we did last time! We suggest this route but you could spread it out longer than 5 days and spend a little time in each section: https://www.followmeaway.com/icelandroadtrip/ as well as taking time to go here since you will be there longer: https://www.followmeaway.com/ultimate-guide-snaefellsnes-peninsula-iceland/ Renting a car isn’t too expensive but gas is more pricey! Renting a car is like $250-$350 and you do NOT need a 4×4

  2. Christine

    If you do need to eat out the cheapest menu options are usually Icelandic meat soup and mashed fish. If these dishes are on the menu they are usually pretty filling and you often get free refills with the soup.

  3. Jan

    For Europeans, the gas price is pretty much the same as in our countries. Also, Iceland is tiny; the distance between Rejkyavik and the northern town of Akureyri is about the same as New York to Washington DC.

    1. Follow Me Away Post author

      Hey Jan! Good point about the gas prices! Even though Iceland is technically way smaller than America, many people are fooled by the size of the country! A drive from Reykjavik and the town of Hofn is a good 6+ hours depending on weather and the capital to Vik is a little over 2. So while it isn’t 20 hours like in the United States, it could still be considered further than expected! 😉

  4. Wouter

    We went to Iceland last spring, it was really amazing! Thank so much for your work and info! It was my second time i have visited Iceland but after reading your inspiration and want to jump on the plane again.

  5. Amy

    Thank you for your tips we are planning our first trip and I had no idea what extra charges there would be! The gas doesn’t seem to much higher than we pay in Canada at a high point but the bathroom charge is very helpful information we have 4 children which means lots of bathroom breaks lol.

  6. Mary

    Great tips! We are heading to Iceland at the end of March for a week and are planning to rent a car for 3 days. Thanks for the info.

  7. Mark

    Everything seems to be based around driving. Crazy prices for fuel, parking and tolls. Food is easy enough- just bring in ton of tuna and canned food. Pay for the extra luggage for any of those types of goods ? Even the bathrooms?!?!? Iceland is on the radar but just need to figure out these types of tips.

  8. ashley

    Did you happen to find it easy to find healthy foods at the Bonus stores or other grocery shops? I read in another post that you brought food in from the States. Many countries have you declare food or ban certain items…did Iceland have any rules about this since they are an island?

    Thanks for the tips for saving extra. I actually don’t mind paying for restrooms. I find they tend to be a little cleaner when people have to pay money to use them 😉


    1. Follow Me Away Post author

      Yep there is plenty of healthy food. While some of it may be a bit more expensive, it is certainly there. We just brought our food in like normal…we didn’t hide it in any way and they didn’t ask questions or care. We like to bring odds and ends from home like granola bars and cookies so we don’t have to spend a ton of money on location on those types of items.

  9. Darlene

    I just returned from Iceland and think the biggest expense is food/eating out – $25 for a mediocre burger, $35 for fish and chips. We stayed at a fully equipped AirBandB, which enabled me to make a nutritious breakfast each morning and a few fish dinners. This saved us a significant amount of money.

  10. Robin

    We just spent 10 days in Iceland. I thought I was mentally prepared for the prices. Turns out I wasn’t. Good news is that wifi is free and available everywhere and the water is fantastic and pitchers with cups can be found in most places.

  11. Mechelle C

    These were great tips, thank you! We are going in May for 8 days. We are staying in a cottage with fully equipped kitchen. Argh, didn’t know about the bathroom fee… But, you can buy these special urinals for women and you go like you are a man.

    1. Lisa

      Hi! Cottage? Where? How are you getting around? I’m looking at Iceland. I don’t even know where to begin. What do you visit? Is 10 days too long? Help!!!!

    1. Follow Me Away Post author

      Honestly, it isn’t necessary at all! You can see all of the best spots with a regular two wheel drive car!

  12. Gabi

    Hoping to get to Iceland to camp and hike soon but trying to find a cheap way to do it so thanks for sharing these helpful tips! Some of these things are crazy expenditures!

  13. Anjali Chawla

    Those are some great tips. Heading to Iceland in March and I’m sure these tips will come handy. Iceland is expensive and I am assuming that it’s more so during the winter season. Chasing the Northern Lights is on the list.

  14. Robert Scott Barron

    If you forget your water bottle you can get one at the tourism office in downtown Reykjavik. It makes a nice souvenir. You can purchase alcohol on arrival at their Duty Free. If you don’t drink it makes a nice gift for local friends you make.

  15. El

    As of September 28, 2018, the tunnel north of Reykjavik is toll-free. https://grapevine.is/news/2018/09/28/starting-today-icelands-hvalfjordur-tunnel-will-be-toll-free/

    However, there’s a new toll tunnel east of Akureyri towards Myvatn. The old route is still there to avoid the toll, but it is prone to weather since it goes over a mountain.

    Thanks for the other tips. I’ll be driving the Ring Road clockwise last two weeks of September 2019.

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