Iceland on a budget: 10 money-saving tips

As a budget traveler going to Iceland was a huge sticker shock. Even with all my budget travel hacking knowledge I spent a fortune on a 11-day trip for two. And though there are certainly ways to save on your trip to Iceland it’s also important to point out that even the most seasoned traveler will spend money in Iceland. There’s just no way around that. But I have found a lot of great ways to save, too. Here is my guide to Iceland on a budget with 10 of the best money-saving tips:

What is the cost to go to Iceland?

No matter how you cut corners, Iceland is not a cheap vacation destination. But you can make it much more affordable. After airfare and hotels your next largest expense will likely be food. Dining out in Iceland is expensive – we averaged $45 per person per day just on dining.

But there are a lot of variables to your final cost to visit. For one going during peak season will add hundreds of dollars per day between your rental car and hotel stay. Or, choosing to eat in or eat the relatively cheap Icelandic hot dogs daily can save you more money along the way. All to say the cost is flexible and varies based on your travel style and what you’re willing to compromise on.

On average a couple will cost about $300-$500 per day, including your airfare, hotel, food, transportation, and entertainment. But if you choose to camp and eat cheap meals you could cut this down to around $200 per day.

Iceland with points and miles

If you have points and miles you can find some other ways to save on your airfare and hotels. Consider booking a coaching call to learn more about saving thousands on your trip to Iceland (or anywhere else in the world).

How do I visit Iceland on a budget?

The first rule when deciding your budget for Iceland is determining what kind of experience you want to have. For me, camping and eating canned soup to “visit Iceland on a budget” was just not an option. So you then have to decide two things: what is a budget I can afford for the trip and where can I save to make the experience I want happen within it.

Once you have those two things you need to cut your costs to fit your travel budget. Below you’ll find my ten best ways to do so in Iceland.

10 money-saving tips for visiting Iceland

Travel during shoulder season

One of the easiest ways to save money on a trip to Iceland is visiting during shoulder season. Shoulder season runs April to mid-May and then again September to October. Not only will your hotels and rental cars be much cheaper because of less demand but you’ll find some amazing flight deals, too.

Travel Tip! I book our flights with a Thrifty Traveler deal for just $400 per person! You can join today with my code KENDYL10 for a great discount on your first year’s membership!

Book your rental car early

Booking your rental car early is a great way to save hundreds of dollars. I recommend booking through AutoSlash to get the best rate. They’ll compare all your booking options and give you the best rate possible. Keep in mind that you should book an AWD SUV. Even though you’ll pay more per day you’ll be thankful with the uncertain weather and road conditions.

Pack snacks

Many people pack snacks in their luggage to bring to Iceland with them to save money in Iceland but you can also do this upon arrival at the local grocery stores. Things like granola bars and jerky will pack easily and keep you full. If you’re really looking to save, some people will even bring things like boxed macaroni and cheese and cup of noodles to reheat on their trip!

Take advantage of the happy hours

This is an especially good tip in Reykjavik. Happy hours are a great way to get deals on alcohol and snacks. And with most happy hours running from 4pm to around 6 or 7, you can easily save on your dinner, too. 

Travel Tip! Want help finding the best happy hours anywhere in the world? Be sure to download my free search term guide!

Reserve your hotel early (and compare rates)

There is certainly a sweet spot to saving the most money with hotels but the general rule of thumb in Iceland is to book early and compare your rates. I found on my trip that Booking.com consistently had the best rates in Iceland but it’s a good idea once you find a hotel you’re interested in to compare all your booking options on Google.

Earn cash back on your organized activities

I don’t recommend booking many organized activities in Iceland (we’ll get to that later). But if you plan to book guided excursions be sure to earn cash back on your booking for some easy savings. You can easily do this with Viator through Rakuten. Rakuten consistently offers increased 10% back on Viator, so just wait and book during one of these offers.

Use points on your hotels

There aren’t that many points and miles hotels in Iceland and most of them are near Reykjavik. If you have points in brands like Hyatt, IHG, Marriott, or Hilton you might be able to get a couple free hotel nights during your stay. 

Travel Tip! Check out Awayz to easily compare your hotel options with points.

Do experiences without a guide

I’d recommend only paying for experiences that you can’t do on your own in Iceland. Day trips and evening views of the Northern Lights are things you can do without a guide, so don’t pay hundreds of dollars per person to do it with one. Even with the rental car you’re still saving money. I’d only recommend a guided experience for things you can’t do otherwise, like a glacier cave tour or food tour.

Check out more ideas of DIY things to do in my 7-Day Iceland Itinerary!

Get breakfast included

Finding hotels that include breakfast in the room rate will likely save you money along your trip. On my trip we ate breakfast for free at the hotel and then ate a packed snack for a light lunch. That way we almost always only paid for one meal a day. 

Find the free and cheap activities

Finding things to do in Iceland is only expensive if you make it expensive. Like I mentioned earlier, I’d recommend only paying for guided experiences that you can’t do on your own. But you should also try to find and build your days around free and cheap activities you can do in Iceland.