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7 Tips for Saving Money in Iceland

7 Tips for Saving Money in Iceland

Iceland had long been at the top of my list of countries to visit. Everything I saw and learned about the island of roughly 320,000 people drew me in. The country’s unique landscapes have served as the background for the popular TV show “Game of Thrones”, the movie “The Secret Life of Walter Mitty” (and others), and music videos for The Saturdays (my favorite), Bon Iver, and Justin Bieber.

Despite Iceland’s limited population, Icelanders are quite progressive socially. They elected the first openly gay female head of government, Jóhanna Sigurðardóttir, in 2009, and about one-third of the country attends the annual Reykjavik Pride events. One third!

Rainbow street in Reykjavik
A street painted with rainbow colors in Reykjavik

Reykjavik also hosts the world’s largest display of penises and penile parts at the Icelandic Phallological Museum.

Icelandic Phallological Museum

So, Iceland has a reputation for being jam-packed with sights, history, and culture. I was determined to go.

But, my main deterrent was the cost. No longer simply the homeland of Björk and Sigur Rós, Iceland has been discovered as a tourist hot spot in recent years. With that, there are many more options for people to experience Iceland. With proper planning, I was able to travel around Iceland for a week and see a fair amount while not spending as much as I thought I had to. There were also some things I realized could have saved me money had I known in advance.

This is where where I went in Iceland:

Here are my top tips for traveling Iceland on a budget:

#1 Use a budget airline (if you dare). As with anything, there are pros and cons. Wow Air, a budget Icelandic airline, had recently started flying directly from Baltimore to Reykjavik, so I bought a round trip ticket for $250. The positive of this was the dirt cheap direct flight. The cons were the additional fees for all checked bags and any carry-ons over 7 kilograms (15 pounds). It’s difficult enough to pack for a different climate in a carry-on, but the luggage restrictions can also cause serious delays when checking in. I almost missed my return flight because every customer in front of me seemed to be checking multiple suitcases and ski equipment.

Onboard the flight, there are absolutely no frills. You pay for all food and drinks and if you want entertainment, you can rent an iPad for the duration of the flight.

Wow Air’s route map (courtesy

#2 Travel with a buddy or two. This doesn’t always work out because people have other commitments and it’s hard to align schedules, but another person can split the price of renting a car, filling up on gas, and sometimes you can get a nicer or private room if you pool your money. Lodging in Iceland is still quite pricey so you and your travel partner(s) still might have to sleep in a hostel dorm room, but you might be able to upgrade to an Airbnb or other private accommodation. Also, if you have another driver, you can alternate resting and driving so that you are able to cover more ground during your trip. There were definitely more sights I could have seen, but I just didn’t have enough energy.

Was just me on this trip. Lots of selfies.
Was just me on this trip. Lots of selfies.

#3 Watch what you eat. I don’t mean eat less necessarily, but the difference between eating out at a restaurant and buying food from the supermarket is pretty steep in Iceland. So, if you’re on a tight budget and don’t mind passing on Iceland’s culinary scene, you can save a bunch by not eating out as much or even at all. This is extreme and I know it won’t work for everyone, but I got by in Iceland by buying a jar of peanut butter and a jar of jam at the beginning of my trip. I bought fresh bread every day to make PB&Js. It wasn’t glamorous and a bit repetitive but it did the trick.

If you stay at hostels, there is often a shelf for communal or leftover food that past backpackers either ditched to save weight in their pack or because they couldn’t take it in their carry-on luggage on the flight home. Whatever the reason, I scored some great Nutella, pretzels, and soup mixes from several hostel freebie shelves.


#4 Bring food with you if you can. I had planned on bringing a ton of snacks to tide me over between meals, but I had to ditch several bags of Chex Mix so that I could save room and weight in my carry-on bag. But, you may be able to bring a few snacks with you or at least stuff your pockets with Cliff bars before checking in for your flight.


#5 Skip the Blue Lagoon if you’re strapped for cash. I know it’s marketed as the most idyllic part of Iceland, especially for travelers on a quick stopover, but entrance to the Blue Lagoon can be pricey. The most basic entrance fee during the off-season is 40 Euros (about $45). And that doesn’t include transportation or any extras like being able to use a towel. If you’re trying to save money but still want to experience some of Iceland’s geothermal water, go to a regular public swimming pool. For 900 krona (a little more than $7), you can enter Reykjavik’s Laugardalslaug pool complex, which includes an indoor pool, outdoor pools, and some very relaxing hot pots.

If you’re renting a car, you can find hot springs that are free to use also. Try to search for both hot pots and swimming pools around the country.

#6 Save on accommodation.
Bring your own sleeping bag. It is quite common for hostels to charge you to rent their sheets. I bought this lightweight sleeping bag that could easily fit in my carry-on. It’s not the warmest, but it was perfect for the summertime when I was there. 

You can also camp or rent a camper van. Purchase the Camping Card, which allows a family or group to camp for up to 28 nights at 41 campsites around Iceland for 110 Euros ($125). Campervan Iceland is one of several companies that rents out campervans. Their cheapest option starts at 15,500 krona (about $126) during the low season and can sleep two.


#7 Pay less to drink. Alcohol can be pretty expensive when you’re out in Iceland. You can save a fair amount by stopping at the duty-free before leaving the airport and stocking up on whatever Icelandic or foreign liquor you want. Or save even more by not drinking.

Iceland’s water is super clean, so don’t waste money on bottled water. Bring water bottles and fill up at your accommodation before heading out for the day.

You could drink at this bar in Reykjavik if you wanted to.
You could drink at this bar in Reykjavik if you wanted to.


Many of the waterfalls and amazing scenery are accessible just by pulling over on the highway. Make sure you’re well out of the road if you stop though.

Visiting the Skógafoss waterfall is completely free.
Visiting the Skógafoss waterfall is completely free.


Despite it being the summer, I was able to glimpse a single streak of the Northern Lights as I walked back to my hostel after a night out in Reykjavik.

The amazing view behind this blurry photo was completely free.
The amazing view behind this blurry photo was completely free.

I also got a free pic with Bjork.

She didn’t sign any autographs though.
She didn’t sign any autographs though.


So, Iceland lived up to all of the hype for being a very progressive, quirky, and beautiful country that a lucky few are able to call home. Its Scandinavian prices may still prevent many from being able to afford a trip to Iceland, but the expansion of the tourism industry there will hopefully bring more budget options for visitors. Until then, I hope that these tips will help you plan an affordable but unforgettable trip to Iceland.