Visiting Iceland on a Budget: My Complete Cost Breakdown

Iceland on a budget? I’ll be honest—I wasn’t sure it was possible. Before our trip, I’d heard all the warnings: gas station hot dogs that cost more than a sit-down meal back home, hotel rooms that make your wallet sweat, and guided tours with price tags that felt like a small mortgage.

But still, I was determined to make it work. We spent 10 days driving past lava fields, hiking around Vatnajökull National Park, and pulling off the road every time we saw something beautiful (which, spoiler: is all the time). And yes, we did it all on a mid-range budget—no campervan, no skipping real meals, no sacrificing experiences.

From hitting up a classic Golden Circle tour to wandering the shores of Glacier Lagoon, we found that with the right planning, Iceland doesn’t have to break the bank. We prioritized day trips we could do on our own, booked hotels with breakfast included, and rented a car that let us explore at our own pace.

This guide is everything we learned—the wins, the mistakes, and the tips that helped us save hundreds. If you’re trying to make Iceland affordable without missing the magic, you’re in the right place.

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Estimated budget to visit Iceland

Unless you’re planning to live off gas station hot dogs, stock up on groceries, or sleep in a campervan, Iceland’s going to be expensive—even for mid-range travelers. Hotels, rental cars, and dining out add up fast, and it’s not uncommon for a “normal” travel day here to feel like a hit to the wallet.

But I don’t say this to scare you away. Iceland is still absolutely worth it—and there are ways to make your trip more affordable. (Trust me, I’ve done it.) That said, even the savviest budget travelers can find Iceland tricky, especially if you’re visiting during the high season.

Prices for major expenses like hotels and car rentals fluctuate wildly based on the time of year. During summer, costs can skyrocket. But in shoulder season, you might see discounts of up to 50% compared to peak pricing.

All this is to say: any Iceland travel budget is just a rough guide. Your actual spending will depend on when you go, how you travel, and where you’re willing to cut back. With the right planning, you can still experience Iceland without draining your bank account.

My Real World Cost Breakdown

My husband and I spent 10 days in Iceland and averaged $354.07 per day once we arrived. That total includes our hotel stays, meals, rental car, gas, activities, groceries, and all the little expenses along the way.

Including our roundtrip flights, we spent $3,984.76 total for the entire 10-day trip. For us, that’s a lot.

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To give some context—most of the experiences we did were self-guided. We skipped a lot of the pricier tourist attractions (yes, including the Blue Lagoon) and opted for free or low-cost alternatives. And, we only booked one guided tour, and I still feel like we got the full Iceland experience.

We also booked our last two nights in Reykjavik using hotel points with Hilton. This helped us save well over $600 on our hotel bookings.

The biggest shock for me? Food prices. We tried to limit eating out to once a day, mixing in budget-friendly options like hot dogs or lamb burgers alongside the occasional higher-end meal. Even with that strategy, dining costs added up quickly.

Getting to Iceland cheaply

One of the best things about planning a trip to Iceland on a budget? It’s surprisingly easy to get there for less than you’d think. Reykjavik is one of the cheapest European destinations to fly into from the U.S., especially during the off-season. Roundtrip flights from the East Coast often dip as low as $250.

Even during more popular travel months, you can still find cash fares in the $300–$500 range from major U.S. cities. Several major airlines, including Icelandair, operate nonstop flights to Reykjavik from hubs like Boston, New York, and Chicago. Just remember—Icelandair is a budget airline. You’ll want to factor in the cost of extras like seat selection, baggage, and meals.

If you’re flying from a smaller airport, consider using a positioning flight. Starting your trip from a bigger international hub can save you hundreds.

I also recommend signing up for Thrifty Traveler. They frequently find cheap flights to Iceland, and their Premium membership sends alerts for big discounts—often ones that more than pay for the subscription itself.

How to fly to Iceland using points and miles

Iceland is a great place to book cheap cash flights—especially in low season—but it’s still possible to fly there for nearly free using travel points and miles.

If you have points from travel credit cards like Capital One, Chase, or Amex, you’re in a great spot. These cards let you transfer points to airline partners, which means you can often book flights on major carriers like Delta, United, or American for less.

💡 Want help finding the best way to book your flights to Iceland—whether with cash or points? I offer 1-on-1 coaching calls where we walk through your exact situation and build a strategy to save you money (and miles). Book a call and let’s make your Iceland trip even cheaper.

But here’s the thing: because flights to Iceland are already pretty affordable, using points doesn’t always give you the best value. In some cases, you might be better off saving those points for a more expensive destination or booking a premium cabin.

That said, if you’re looking to use points, I recommend trying out Point.Me. It’s a search tool that helps you find the best value for your points across all airlines and programs. It’s especially helpful if you’re flying from a smaller city—just search nearby airports and check for positioning flights to snag a better deal.

Getting around Iceland

It might sound counterintuitive, but one of the best ways to get around Iceland on a budget is to rent a car. While car rentals may seem pricey up front, the math usually works out in your favor. When you factor in the cost of airport transfers, daily tours, and limited public transit, driving yourself is almost always the better deal.

Beyond the savings, having your own rental car gives you total freedom. You can explore remote waterfalls, hot springs, and small towns at your own pace—without being tied to a tour schedule.

It also opens the door to more affordable places to stay. Hotels and Airbnbs just outside popular towns like Vik or Akureyri are often significantly cheaper than in-town options. With a car, you’re free to book based on value, not just proximity.

And if you’re traveling with friends or a partner, the savings multiply quickly. Splitting the cost of gas and rental fees makes this one of the most cost-effective ways to experience Iceland’s epic landscapes without blowing your budget.

How much is a rental car in Iceland

Rental car prices in Iceland vary drastically depending on the season and the type of vehicle you choose. While SUVs—especially AWD models—can cost almost double what you’d pay for a compact car, they’re often worth the extra money.

You’ll have better clearance for Iceland’s rugged side roads, more comfort during long drives, and added safety if you hit unpredictable weather (which happens more than you’d think).

Here’s what you can expect to pay per day for a small AWD SUV:

• Low Season (November–March): $40–$70 per day
• Shoulder Season (April–May, September–October): $60–$100 per day
• High Season (June–August): $100+ per day

Booking early—especially for summer travel—is key. Prices can climb quickly as demand increases, and the best deals go fast. But also be sure to check back often for a better price. Don’t forget to factor in extra costs like insurance and fuel, which can add up depending on your itinerary.

Travel Tip! Be sure to use a travel credit card with primary rental car insurance coverage. This will allow you to use your card instead of paying more money at the counter for additional insurance.

Where to Stay in Iceland on a Budget

Where and when you visit Iceland can have a huge impact on how much you’ll spend per night. To put it simply: the closer you are to summer and the closer you are to Reykjavik, the higher the price tag.

But there are a few solid ways to save on accommodations.

First, hotels are often cheaper just outside of town. Even staying 10–15 minutes away can save you a lot—especially if you have a rental car. That short extra drive could cut your nightly costs by half, which adds up fast over the course of a week.

Second, the northern and western parts of the island are usually more affordable than the popular southern coast or Reykjavik area. If you’re planning a full Ring Road trip or have extra time, consider heading off the tourist trail to save on where you sleep.

When I visited, I consistently found the best deals on Booking.com. Once I logged in, I was able to unlock offers that saved me hundreds. That said, it’s still worth checking direct rates or comparing prices on Google Hotels to be sure.

Lastly, look for guesthouses, smaller inns, and Airbnbs. These spots are often more affordable than larger hotels and still offer clean, comfortable stays. Bonus: many include kitchens, which can help you save even more on food.

Iceland on Budget: How to do Experiences for Less

When it comes to experiences, Iceland can be as expensive—or affordable—as you make it. Guided tours like glacier hikes, food tours, or ice cave excursions are where costs really start to add up. Many of these tours run well over $100 per person for just a few hours, and multi-day tours can be even pricier.

But here’s the good news: you don’t need a guide to see the best of Iceland. Some of the country’s most iconic sights—like waterfalls, black sand beaches, and geothermal areas—are completely free to visit on your own. Renting a car gives you the flexibility to reach these spots without relying on expensive tour groups.

There are also tons of smaller experiences that cost less than $15 per person, including local museums, public hot springs and swimming pools, and national park entrance fees. These kinds of activities often get overlooked but can give you a deeper look at Icelandic culture without blowing your budget.

So, the more you can DIY your Iceland adventures, the more money you’ll save. Focus on self-guided experiences, pack your own snacks, and be selective about which tours are really worth the splurge. To say, splurge on the experiences you can’t DIY (like ice caves).

Eating in Iceland on a Budget

Let’s be blunt: no one ever comes back from Iceland raving about how cheap the food was. In fact, it’s the opposite. I’ve lost count of how many people have told me, “I couldn’t believe how much a meal cost!”

And honestly? Same. Meals at a basic sit-down restaurant—nothing fancy—can easily run you $30–$40 per person. It’s a shock, especially if you travel where eating the food is experiencing the culture.

But before you panic and start packing ramen, there are a few solid ways to save on food in Iceland without going all nomadic college student along the way.

First, book a hotel that includes breakfast—and eat it. A lot of hotels offer breakfast either free or for a small fee. It’s almost always worth it. Not only will it fill you up, but it also saves you from having to buy a pricey lunch later.

Second, snack smart. If you load up at breakfast, you can usually get by with a light snack midday. Grab a few granola bars, fruit, or skyr from the grocery store and keep them in your day bag. It’s a great way to avoid the $20 sandwich trap at roadside cafés.

Third, hit the grocery stores. Bonus and Krónan are Iceland’s main budget supermarkets, and they’re your best bet for quick meals, snacks, and drinks. If your hotel or Airbnb has a fridge or microwave, even better—you can stock up and DIY a few meals.

And finally, don’t underestimate gas station food. I know, it sounds weird. But Iceland’s gas stations serve hot meals like burgers, hot dogs, and fish and chips—often for under $15. It’s not fine dining, but it’s tasty, filling, and much easier on your wallet.

Travel tips for saving money in Iceland

Iceland is pricey—there’s no way around that. It’s not the kind of place where you can travel for free, but with the right planning, you can absolutely bring costs down to a more manageable, mid-tier budget.

These Iceland money-saving tips won’t turn your trip into a backpacker’s dream, but they will help you cut costs in smart ways without sacrificing the experience. I used every one of these strategies on our 10-day trip—and they made a big difference.

Travel During Shoulder Season

One of the easiest ways to save money in Iceland is visiting during shoulder season. That’s April to mid-May and September to October. You’ll find lower prices on hotels, rental cars, and even some tours and flights.

Travel Tip: We booked flights for just $400 roundtrip through a Thrifty Traveler deal.

Book Your Rental Car Early

Rental car prices can double the longer you wait. I recommend using AutoSlash, which compares rates and tracks price drops. Be sure to book an AWD SUV—you’ll be glad you did when the weather turns.

Pack Snacks (Or Even Lightweight Meals)

Bring snacks from home or stock up at local grocery stores like Bonus or Krónan. Granola bars, trail mix, and jerky are easy to stash in your day bag. Some travelers even bring boxed mac and cheese or ramen cups to reheat on the road.

Take Advantage of Happy Hours

Alcohol in Iceland is notoriously expensive. But happy hours—especially in Reykjavik—can cut drink prices in half and often include food deals. Most run from 4–7 p.m., making it a great time to grab dinner and drinks.

Reserve Your Hotel Early (And Compare Rates)

In Iceland, the earlier you book, the better the rate (usually). I found Booking.com had the best prices overall, but always double-check with Google Hotels or direct booking to compare. Rates can vary more than you’d expect. Also, be sure to book a refundable rate and check back for better prices frequently.

Earn Cash Back on Tours

If you plan to book organized tours, make sure you’re earning cash back on them. Rakuten often offers 10% back on Viator bookings. Wait for a bonus cash back period, then book for easy savings.

Use Points for Hotel Stays

Hotel points can help offset costs—especially if you’re staying near Reykjavik. Brands like Hyatt, Hilton, Marriott, and IHG all have properties where you might snag a free night or two with points.

Want help maximizing your travel points to take more vacations? Start Here.

Get Travel Insurance

Travel insurance is one of those things you don’t think you need… until you really, really do. Iceland’s weather is unpredictable, and flight delays, car trouble, or last-minute cancellations happen more than you’d expect.

We’ve used travel insurance to get reimbursed for everything from storm-related flight changes to extra hotel nights. Trust me—it pays for itself.

Skip the Guide When You Can

Many of Iceland’s best experiences don’t require a tour guide. The Northern Lights, waterfalls, and most scenic drives are easy to do on your own. Save your money for the tours you can’t do solo—like glacier hikes or food tours.

>> Check out my 7-Day Iceland Itinerary for more self-guided ideas!

Find Hotels with Breakfast Included

Hotels that offer free breakfast can help you cut food costs significantly. On our trip, we ate a big breakfast at the hotel, packed a snack for lunch, and usually only paid for one meal a day.

I like to search my hotels with the “breakfast included” search filter on but you can also choose a hotel with a cheaper breakfast add-on option.

Prioritize Free and Cheap Activities

The beauty of Iceland is that many of its best experiences are free. Waterfalls, beaches, hot springs, and hikes don’t cost a dime. Plan your itinerary around those, and only splurge on activities that truly require a guide or booking.