That said, Iceland can easily be done on a budget, if you know how. Our guide to visiting Iceland on a budget can save you a pretty penny without compromising on the value of your experience. From advice on opting for self-drive tours and campsites to the best way to experience the Northern Lights for free, we share all of our top tips, recommendations, and advice so that you can make your dream Icelandic trip a reality.
Visit Iceland in the off-season
June, July, and August are Iceland's busiest and most expensive months for tourism which is why the best time to visit Iceland is in the off-season from late September to early May. Everything from hotels to car rental and entrance fees is reduced to encourage tourists to continue visiting during these months.
If you're flexible with dates, it's even possible to find flights from as little as 60 Euros from as early as September. While the weather may not be as warm, it's an easy compromise to make when the benefits include fewer crowds and cheaper prices. Plus, the elusive Northern Lights are much more likely to make an appearance in the off-season.
Go camping in Iceland
Iceland is all about the great outdoors and there's no better way to experience it by cosying up with nature on a camping trip. Starting from 10 Euros per night, campsites are cheaper than even the most budget-friendly hotels, guesthouses, and hostels. Campsite standards are extremely high in Iceland so worry not, even the cheapest ones provide excellent facilities.
There are hundreds of campsites dotted across Iceland, even reaching its most remote corners, which means you'll always find somewhere to stay if you decide to go camping in Iceland. Northbound can take care of all your Iceland camping trip needs with their top selection of affordable campers and motorhomes complete with all sleeping and cooking essentials.
Opt for Self-drive tours
From single-day trips around the Golden Circle to multi-day tours along the South Coast Way, there is an overwhelming number of guided tours to choose from when visiting Iceland. However, the benefit of having a guide and itinerary comes at a high price. Especially since the majority of tours' highlights (including Thingvellir National Park, Geysir, and Gullfoss) are actually free to visit.
By embarking on a self-drive tour instead, not only do you benefit from cutting costs, but you also benefit from the comfort and autonomy of your own vehicle.
Rent an Economy Car
Did you know you can rent an economy car for a whole week in Iceland for less than the cost of a day trip for two people around the Golden Circle? Well, you can! For just 34,000 Icelandic Krona (240 Euros) you can hire a four-door hatchback with all the mod-cons at Northbound. It's the ideal car for couples and small families to explore Iceland's well-trodden routes like Golden Circle and the South Coast Way since they are particularly easy to drive along.
Those keen to do longer drives or navigate Iceland's more remote driving routes like Westfjords Way might prefer one of Northbound's SUVs or 4x4s which are also surprisingly affordable.
Remember nature is free
Despite Iceland's greatest appeal being its natural landscapes, there is no charge to visit even its most popular landmarks. Yes, Thingvellir National Park, Geysir, Jökulsárlón glacier lagoon, Reynisfjara black sand beach, and Skogafoss and Gullfoss waterfalls are all free to visit. So, the more time you spend in the great outdoors, the less money you will spend.
There are tours available for hikes through Iceland's dramatic valleys, rifts, and glaciers, but self-guided hikes are also allowed. However, this is only recommended to those with a good sense of direction and a reasonable fitness level because Iceland's terrain can get rough and many of the routes are pretty remote.
Avoid the Blue Lagoon
The Blue Lagoon thermal hot spring is undoubtedly one of the most iconic sights to visit in Iceland. Not only does it offer extraordinary scenery, but is also benefits from the luxury of its adjoining hotel, spa, and gourmet restaurant. However, this thermal spring's prestige and popularity come at a pretty high ticket price. In the off-season, entry starts at around 11,000 Icelandic Krona (70 Euros) per person.
While the price is worth it for many who have dreamed of floating in its icy-blue pools, there are free alternatives for those who are prioritising their budget. Reykjadalur Valley hot spring river on the Golden Circle route is our recommended Blue Lagoon alternative.
See the Northern Lights for free
Northern Lights tours are some of the most in-demand tours in Iceland because many people believe they are more likely to see the lights if they pay for an expert guide. While it can be useful to hire a guide, it's not at all necessary. After all, the likelihood that the Northern Lights will appear in the sky is not dependent on whether you buy a ticket to see them or not! As long as you are in the right place at the right time, your chances are pretty high.
For the best chance to see the Northern Lights, head to the Jokulsarlon glacier lagoon which is a 380 km (five-hour) drive along the South Coast Way from Reykjavik. The lights appear more frequently in the autumn and winter months, but are often seen during the summer in Jökulsárlón too.
Be savvy with your spending in Reykjavik
Between hotel costs, restaurant bills, and entrance tickets, your travel funds can quickly dwindle when staying in cities like Reykjavik ? even if just for a few days. For those on a budget, it's all about picking and choosing where to spend and where to save. Luckily, Reykjavik has the ability to cater to all budgets. As well as swanky hotels, there are equally inviting yet vastly more affordable Airbnbs and hostels. And while there are multiple Michelin-worthy restaurants and chic cocktail bars, there are delicious street food vendors and cheap n' cheerful Irish pubs too.
For shopping? Rather than rinsing your wallets in the fancy Laugavegur boutiques, head to the charming Kolaportið Flea Market to buy souvenirs and hunt through to bric-a-brac instead.
Enjoy free things to do in Reykjavik
Another great way to save money whilst staying in the city is to take advantage of the free activities it has to offer and save your pennies for your most highly desired experiences. There's so many enriching free experiences in the capital of Iceland that it's easy to feel like you've experienced the best it has to offer in just a few days without spending much at all. Embark on a free two-hour guided walking tour around Downtown Reykjavik or a self-guided tour of the city's street art.
Visit a number of free museums including the National Gallery of Iceland and the Icelandic Phallological Museum. Window shop in the Laugavegur boutiques. Enjoy the city views from Hallgrímskirkja tower and the seascape from the Harpa concert hall. In sumer, it's even warm enough to bathe at beach!
Be wise about where to spend and save
Whether you're booking flights or excursions for your trip to Iceland, don't just book the first option you find. There's almost always going to be a better deal out there. It also helps if you can be flexible with dates because a flight that might cost 200 euros on one day may well be just 100 euros the following day. Of course,the sooner you book, the cheaper it will be too, as a general rule. However, there are plenty of last-minute deals to be snatched up as well.
The more you save on fundamental expenses like travel and accommodation, the more you'll have to spend on the fun stuff like whale-watching tours and glacier hikes.
How can I save money on travel in Iceland?
Reykjavik itself is a very walkable city, but those wishing to see the best of the Icelandic wild on a budget can hire an economy car which saves you money otherwise spent on group tours and excursions.
Are there budget-friendly accommodation options in Iceland?
While Iceland boasts an elite repertoire of high-end hotels, it's also heavily populated with affordable guesthouses, private rentals, bnbs, and hostels. However, campsites are by far the cheapest kind of accommodation in Iceland.
What is the cheapest month to visit Iceland?
There isn't one particular month that is cheapest to visit Iceland in. However, prices do change between its peak and off-peak seasons. The peak months of June-August are significantly more expensive than September-May except for December and January.
What activities can I do for free in Iceland?
Surprisingly, most of Iceland's best and most popular attractions are actually completely free including its national parks and waterfalls. Only special excursions like boat trips, diving, and ice cave explorations which require a professional guide are charged.
Also there are many hot springs that you won't have to pay any fee for entering and swimming, but for using the heated swimming pools you will have to pay a small fee.