Top Budget Travel Tips for Visiting Iceland

Disclaimer: This is not a sponsored post, I paid for this trip myself. All recommendations and opinions are my own.

Iceland is a destination that I’ve been dying to visit for a long time, but knowing how expensive it is, I was worried about how we were going to afford it. But don’t let that put you off, because there are lots of ways you can save money. For example, did you know that the natural sites such as the waterfalls and geysers are absolutely free?! By following the tips below, we were able to keep our budget in check.

Travel Off-Season

Sadly, due to its all year-round popularity, Iceland doesn’t really have much ‘off-peak’ time. Summer is popular because of its long light hours, and the warmer weather makes it safer and easier to get around. However, winter is also a popular, with tourists flooding in to see the Northern lights. There is limited accommodation available, so it quickly books out during these periods.

To save money, aim to travel during the quieter periods such as early spring – April to May, and autumn – September to October. Don’t feel disappointed about having to travel outside of peak season, as you will enjoy cheaper accommodation and fewer crowds at the spectacular waterfalls and geysers.

We travelled at the end of September, as I worked out that this was about the quietest and cheapest time. The European school holidays are over, and the weather is still relatively mild. This also meant that we could get away with driving around in a car, as we didn’t want to pay a ton of money to hire a 4WD.

Reduce Your Luggage

If you are travelling with a budget airline that has additional charges for checked in baggage, then consider taking carry on only or paying for the cheapest luggage weight possible. Sometimes, if I am travelling with my husband, we just pay for one checked in bag and share it (warning – this can lead to arguments about how much room each person gets in the suitcase!).

My husband and I travelled around Iceland for nine days and we both managed with just a carry on each. We were travelling in late September – early October so had bulky warm clothes and some food items, but we managed it, so I know you can too! We just wore the bulky stuff like our jackets and boots on the plane. Iceland is a very casual place, so you don’t need much variety in clothing. In addition, some of the guesthouses and hostels have washing machines available to use so you can do some laundry during your trip, reducing the amount of clothing you need to bring with you.

I know that some of you might be freaking out about how you can possibly travel with only a carry on, but seriously, it can be done! To help you pack light, ready my post on how to pack an extra light toilet bag.

Save Money on Car Hire

Hire a car instead of a 4WD. Cars come with snow tyres, so if you are sticking to the main roads, then you should be fine in a car (unless it is heavy winter snow of course – but in this case, you might be hindered by road closures).

• When you arrive to collect your hire car, you will be pressured into taking out sand and ash damage insurance cover. That’s because severe winds, mostly on the south shore, can cause damage to vehicles. This is something that you will just need to make a personal decision on. Maybe consider checking the weather forecast when you arrive to help you make your decision.
• Petrol is expensive in Iceland. Save on fuel by hiring an economic, small car.
• Book your car rental in advance to get the best price.
• Be aware that automatic vehicles are more expensive to rent than manuals and harder to come by. So be prepared to pay more and to book in advance if you need an automatic.
• Most car hire companies charge a fee for additional drivers, so if you can, designate one person to do all of the driving (but be aware of driver fatigue).

Save Money on Navigation

It’s expensive to hire a GPS from the car hire companies. Depending on the length of your trip, it may be cheaper to purchase your own GPS, or Maps SD card for your existing GPS, rather than hiring one from the car hire company. Alternatively, you could use your phone to navigate by using Google’s free Offline Maps. Follow this detailed guide on how to use Googles Offline Maps. Google Offline Maps allows you to access free maps for navigating that can be used offline i.e. you don’t need wifi, data, or roaming to be able to use them.

• Using your phone as a GPS will drain your battery quickly, so use a portable battery charger which you can use to charge your phone and any other USB chargeable devices.
• If you prefer a paper map, then purchase an Iceland road map before you go. At least it’s reliable and won’t run out of battery or malfunction like the electronic options!

Don’t Stay in Hotels

Hostels and guesthouses are generally cheaper than hotels. They are also much more common, so being willing to stay at one will give you more accommodation options. Most accommodation in Iceland only offer shared bathrooms. Although new hotels with ensuites are being built due to the tourism boom, they come at a premium.

I recommend the website Booking.com because not only does it give you the cheapest price, but also provides a range of accommodation options including B&B’s, guest houses, hostels, hotels, apartments.

Hostels and guesthouses are a great way to meet your fellow travellers and they often provide free breakfasts and have access to a washing machine which is helpful on longer trips.

Consider Renting a Campervan or Camping

Ok, so this option won’t suit everyone, but camping or campervanning is a cheap and fun way to travel, combining transport with accommodation. This is best done during the warmer months though, as most sites are closed during the winter.

Food and Drink

Cook Your Own Food

It is very expensive to eat out in Iceland. Although I don’t want to sound like I am bad mouthing Icelandic food, it’s not really the main reason for visiting, like in France or Italy. Cooking and preparing your own food can save you heaps of money. There is a lot of accommodation in Iceland that offer shared kitchens. This allows you to save money by shopping at the local supermarket and cooking your own meals.

Tips

• Prior to your trip, when visiting food restaurants that have those little sachets of salt, pepper and sugar, grab a handful to take on your holidays.
• Consider taking a small bottle of cooking oil with you. Just make sure that you dispense it into a secure, screw top bottle and seal it in a ziplock bag so that it won’t leak through your luggage.
• Bring food items with you such as breakfast biscuits, snack bars, nuts, a bag of granola for breakfast, pasta, noodles, hot chocolate /coffee /tea, and of course a bit of the naughty stuff like chocolate and biscuits! Each person can bring up to 3kg of food each into Iceland, but no raw eggs, raw meat, or milk.

Grocery Shopping in Iceland

There are three supermarket stores in Iceland, they include Bonus, Kronan and Netto stores. Bonus is the main supermarket and you can’t miss them as they are bright yellow with a large, googly eyed, pink pig logo. Try to plan your shop at the larger towns with supermarkets. In the smaller areas, you can only get limited supplies from small, expensive convenience style stores that are usually attached to petrol stations.

If you are from countries like the UK, USA, Australia and New Zealand, then you might be surprised with the limited range of food on offer at the supermarkets. You will have to use your imagination a bit. There is limited fresh meat (but you can get huge packs of frozen lamb!), fruit and vegetables. But the seafood is delicious and reasonably cheap, and the potatoes are really yummy. We got a gorgeous side of salmon which we ate with potatoes, fresh goats cheese and grilled cherry tomatoes. The next day we put the leftover salmon and sliced up potatoes into a yummy sandwich.

I also noticed that the supermarkets are geared up for the tourist market and sell handy single servings of butter etc… We also purchased things like dried pasta, noodles, eggs (which we boiled up for yummy protein snack), and bread. We also brought food with us from home. I had baked a big batch of my giant choc chunk cookies, and we also brought things along like cheese (hard and vacuum packed off course, so it travelled fine) breakfast biscuits, granola bars and dried fruit and nuts. We even brought along our own hot chocolate.

Pack Your Own Lunch

Pack yourself a picnic lunch to enjoy sitting by a waterfall, or in the countryside, and immerse yourself in holiday bliss.

Tips

• I always travel with ziplock bags to use for sandwiches and for dispensing snacks like chips, dates, and nuts from larger bags into snack sized bags.

Drink Tap Water

If you purchase a drink every time you get thirsty, the cost soon tallies up. It’s also not good for the environment. The drinking water in Iceland is pure and safe to drink, so bring a reusable drink bottle with you like this stainless steel one. Save that money for drinks out on the town!

Reduce Your Alcohol Consumption

I know, I know, going on holiday is when we usually love to indulge in a few drinks. But alcohol is very expensive in Iceland, both in bars and restaurants, and also from the alcohol store, so we cut down on our drinking on this holiday, which is not a bad thing! Alcohol which is stronger than 2.25% isn’t sold in the grocery stores, you can only buy it in the state-owned liquor stores named Vínbúdin which have limited opening hours. We visited a Vínbúdin and I got myself a bottle of wine and my husband bought some Viking Icelandic beer (which he really enjoyed), but that was about it.

Skip the Blue Lagoon

The Blue Lagoon is stunning, but there are plenty of other excellent, much more affordable hot spring options. There are even some FREE hot springs!

Reclaim Your VAT

If you are travelling on a budget, you are not likely to purchase much so this may not apply to you, but Iceland allows you to claim your tax back from items you have purchase whilst on holiday. It is worth taking up this offer if you are planning on buying some expensive souvenirs, because Iceland’s tax rates are very high. You will have to present your passport, your receipts, and fill out some paperwork at the airport VAT reclaim stand.

My husband bought an expensive (designer) jumper in Iceland and along with a few other items we purchased, we were able to lodge our return at the airport and then received the rebate into our back account once we got back home.

Tips

• Custom officers may inspect your items as you depart, so have them easily available in your bag.