How to See the Best of Iceland on a Budget

Exploring Iceland's marvelous natural beauty doesn't have to mean emptying your wallet. Despite its reputation for being more expensive, Iceland offers a treasure trove of experiences that don't cost a cent.

Whether you're hiking pristine trails or exploring geysers, some of Iceland's top tourist experiences can be had without having to pay a massive credit card bill.

From its breathtaking landscapes and waterfalls to its unique geothermal phenomena and dancing Northern Lights, Iceland's natural wonders are largely accessible for free.

So, with careful planning and wise decisions regarding transportation and accommodation, it is possible to enjoy the best of Iceland for cheap.

What is expensive in Iceland?

Although Iceland is not completely barren, its complex geography means that little is actually produced in the country. Iceland's main output is geothermal energy, which is widely available and reduces the cost of electricity and heating for all islanders.

However, most products, except for some meat, fish and wool, are imported, driving up the costs of everything else. This increases local wages, which, in turn, increases costs for tourists.

Hotel accommodation, meals, and souvenirs will all cost significantly more than most travelers might expect. In fact, the cost of living comparison site Number Currently, Iceland is ranked 6.9% more expensive than Norway, a country often perceived as the most expensive in Europe.

Another problem for tourists is that it is not always easy to assess the value in Iceland due to the difficulty of calculating exchange rates.

For example, at the time of writing, 1,000 Icelandic kronor is worth $7.25. This means that working out the actual cost to you of a product priced at, say, 17,500 Icelandic kronor requires some serious mental gymnastics.

Iceland's natural attractions

As tempting as it is to take a selfie at the Blue Lagoon for bragging rights, entry to the world-famous site costs up to $100 in peak season. But much of the attraction's fame can be explained by clever marketing.

Save your money and visit a much cheaper alternativewhere you will have a very similar experience.

Iceland is full of fantastic natural attractions that cost nothing except the means to get there. The country's landscape is a mosaic of waterfalls, geysers, hot springs, glaciers, volcanic landscapes and stunning coastlines accessible without entry fees.

Waterfalls: Don't miss the opportunity to see some of Iceland's most famous waterfalls, such as Seljalandsfoss, where you can walk behind the cascading waters, and Skógafoss, known for its size and beauty. Both are located along the south coast and are easily accessible from the main road.

National parks: Iceland's national parks, including Thingvellir, Vatnajökull and Snæfellsjökull, offer a wealth of free sights and activities.

Thingvellir National Park, a UNESCO World Heritage Site, is a unique place where you can walk between two tectonic plates. Vatnajökull National Park is home to Europe's largest glacier, where you can admire ice caves, glacial lagoons and dynamic landscapes.

Geysers: Although volcanic eruptions are not an everyday phenomenon, geysers are one of the visible indicators of Iceland's volcanic activity hiding just below the surface. Another must-see and free to enter is the Geysir geothermal area, home to the Strokkur geyser, which erupts every few minutes.

Hiking trails: Iceland is a hiker's paradise, offering countless trails suitable for all experience levels. Hike the trails around Landmannalaugar to admire its colorful rhyolite mountains and lava fields, or explore the spectacular landscapes of the Fimmvörðuháls glacier hike.

Northern Lights: From September to early April, the Northern Lights are often visible in Iceland. Patience and clear skies are essential for this unforgettable experience, and you'll increase your chances by heading north.

Tips for a budget-friendly trip to Iceland

The best approach when visiting Iceland is to be prepared to pay for the things that matter to you, but take advantage of savings when and where they are available. As with most ways to reduce the cost of travel, it involves some advance planning.

Reserve a rental car well in advance

Renting a car is often considered a necessity for exploring Iceland's vast landscapes, but it can also be one of the biggest expenses of your trip.

To save money, reserve your rental car several months in advance, especially if you are traveling during peak season. Prices may double or triple closer to your travel dates, if vehicles are available.

Also consider renting a smaller, more fuel-efficient car, as gas prices in Iceland are high. Compare prices of different rental services and look for deals that include insurance and/or don't limit mileage, as this can significantly reduce your overall expenses.

Consider organized tours

Although it may seem counterintuitive when trying to save money, in some cases joining organized tours can actually be more cost-effective than going alone, especially for remote or difficult-to-reach areas. access or for non-drivers.

Tours can provide value by including transportation, entrance fees to attractions, and sometimes even meals. Group tours can also offer information and access to experiences you might otherwise miss.

Solo travelers can benefit the most from these tours, as there is no one to share costs such as renting a car with when traveling alone. If you don't like group travel, look for small group tours to balance cost and personal experience.

Travel off-peak

Iceland's peak tourist season is underway from June to August. Traveling outside of these months not only means fewer crowds, but also lower prices and better availability for accommodation, car rentals and some activities.

Consider visiting during shoulder seasons – spring (April to May) or fall (September to early October) – when the weather is still relatively mild.

The long winter season (late October to March) offers its own unique experiences, such as ice caving and the potential for the Northern Lights, but be prepared for shorter days and colder, more uncertain weather.

Consider self-catering accommodation

To further reduce costs, opt for self-catering accommodation such as Airbnb rentals, hostels with kitchens, or camping in the warmer months. This allows you to save money on restaurant meals by cooking yourself. On a longer trip, those savings can really add up, even if your accommodation costs a little more.

Remember that tap water in Iceland is some of the cleanest in the world. Instead of spending money on bottled water, bring a durable water bottle that you can refill anywhere.