How To Travel In Iceland For Cheap

How To Travel In Iceland For Cheap

Angie Diamantopoulou Author

Text by: Angie Diamantopoulou

Are you planning a trip to Iceland on a budget? Then this guide is for you! You may have noticed while you were booking tickets and hotel rooms that Iceland can be very expensive. So, in this guide I will show you how to travel in Iceland for cheap!

Iceland is a small country. In addition to that, every fruit and vegetable needs to be grown in a greenhouse. Meanwhile, the housing crisis is the cherry on top of this very expensive cake.

The above not only affect Iceland's economy and the expenses of locals, but they can also affect your trip. That's why I have created this guide on how to travel in Iceland for cheap!

Keep reading to find out all our best tips for having an awesome time while saving your wallet!

Before we dive into our best tips for traveling in Iceland for cheap, let's first take a look at what you can find in this blog:

  • why is Iceland so expensive?
  • what are some tips and tricks to travel in Iceland for cheap?
  • what are some cheap tours in Iceland?
  • some tips from a local!

don't miss out!

Our tours are very popular and are often booked weeks or even months in advance! Make sure that you book a spot in your favorite tour ahead!

why is iceland so expensive?

travel in Iceland for cheap

There is no one reason why Iceland is so expensive. Rather, it is a combination of a few different factors; geography, economics and politics, and the tourism boom.

Regarding geographical reasons, Iceland nearly touches the Arctic Circle. ​Therefore, its climate is not ideal for crops or agriculture. 

​According to a report from the European Consortium for Political Research, Icelanders produced “64.9 percent of their own food and beverages in 2010.” The rest of the food, as well as most other goods, were imported

Importing goods to Iceland comes with high tariffs. ​The cost of importing is passed on to the consumer, who is then forced to pay much more than they would otherwise. Some goods are especially susceptible to high tariffs, such as alcohol and wheat.

However, Iceland does produce its own fruit and vegetables, despite the climate. To do so, though, farmers need to grow their products in greenhouses, which often renders the final product even more expensive than its imported counterparts.​

Then, there are the high salaries of the locals. Unlike most countries around the world, Iceland has a minimum wage of approximately 15 USD per hour. ​Higher salaries mean higher prices, though, and often travelers consider Iceland as much more expensive than locals do.

Lastly, we have the tourism boom. ​Every year, Iceland receives millions of tourists. Remember, though, that it is a very small country! Therefore, with so many extra people, demand for goods and services is high, which in turn increases the prices

Therefore, all these factors make Iceland pretty expensive for tourists. Luckily, you can have a great time and save your wallet! Keep reading to find out how!​

what are some tips and tricks to travel in iceland for cheap?

So, how can you save some money while exploring this beautiful country? Thankfully, there are plenty of ways ​to travel around Iceland without breaking the bank!


travel in iceland for cheap

Unfortunately, there are several places around the world where bottled water is a necessity. If you are from a place like that or are used to traveling there, then you might be tempted to buy bottled water in Iceland.

But don't! Iceland has some of the purest water in the world! That is mainly due to Iceland's geological makeup. The water is filtered through lava, which draws out all of the impurities. Therefore, tap water, as well as water from clear streams and waterfalls, is perfectly safe to drink! In fact, locals claim that Icelandic water tastes much better than any other water around the world.

So, avoid buying overpriced bottled water. Instead, carry a water bottle around with you, and fill it at any tap! You can even ask the staff in most restaurants and gas stations to fill it for you!

A bonus: you won't be using as much plastic, so you will also help in our efforts to save the environment!​


buying alcohol for cheap in iceland

Go to any local's house and you will see enough alcohol to satisfy an army. That is because locals try to buy as much alcohol as they can at the duty free every time they travel outside of Iceland, and stock up until their next trip.

Alcohol in Iceland is notoriously expensive, and can even be hard to get your hands on. You won't find any alcohol in grocery stores here. Instead, alcohol is only sold at state-owned liquor stores called Vínbúðin.

Those liquor stores not only have erratic opening hours, but they also jack up the prices due to Iceland's draconian laws surrounding alcohol. ​Therefore, act like a local and get your alcohol at the duty free to save your wallet from the insane liquor tax!


Reykjadalur hiking trail

Everyone knows about the Blue Lagoon. Conveniently located near the airport, with its beautiful milky blue waters and the high-end spa attitude. This attitude, of course, comes with high-end spa prices. A solo visit at the Blue Lagoon will set your wallet back 11990 ISK (98 USD).

In my opinion, there are much better hot pools and springs to visit in Iceland, which will either cost you much less or even nothing at all!

Sure, they might not have the milky blue waters or the facilities of the Blue Lagoon, but you will feel much closer to the beautiful Icelandic nature! The rawness of these hot springs and the fact that they are mostly untouched are what makes them so special.

Try visiting the Secret Lagoon instead. At just a few hours away from Reykjavik and 3000 ISK (25 USD), ​it's the perfect place to relax and unwind for cheap!

If you are looking for a free hot spring, then Reykjadalur is just the place for you! A gorgeous thermal river, Reykjadalur has been used for centuries by locals, and is one of my favorite places to visit! There is a hike to get there, though, so be prepared to walk!

Another option is Seljavallalaug, which is very popular these days. Another completely free hot spring, this one is conveniently located in the South Shore, and it is surrounded by rolling green mountains and sometimes even sheep!

Do you want to find even more hot springs to visit while you travel in Iceland for cheap? Check out this guide on our favorite hot springs and pools!

Psst! Does the Secret Lagoon sound like a dreamy place you'd love to visit? Book a spot in our Golden Circle and Secret Lagoon tour to enjoy both without breaking the bank!


souvenirs in iceland

It's no secret that souvenir stores will charge you an arm and a leg for items that are not even Icelandic. Personally, I love to have souvenirs from my travels, as they are a great reminder of the trip, as well as part of the local culture.

For some authentic Icelandic souvenirs that won't break the bank, visit Reykjavik's second-hand stores! Kolaportið flea market is the only flea market in Reykjavik, located in Tryggvagata. It is a great place to find some authentic Icelandic art, as well as the famous Icelandic wool sweater!

Another great place to get an Icelandic wool sweater is Fatamarkaðurinn Hlemmi, very conveniently located in Hlemmur Square in downtown Reykjavik. They have a huge selection of sweaters, as well as other second-hand clothes and items!

For more creative authentic Icelandic​ souvenirs that won't break the bank, check out this guide!

5. DON'T SHOP AT 10-11

things to not do in iceland ten eleven

Ah, the notorious 10-11. You can find one at every corner in downtown Reykjavik, especially close to hotels. However, locals never set foot there, and for a good reason.

​10-11 might seem like a good place to grab some groceries, but the stores actually jack up the prices even up to 50%. While they are open 24/7, the prices are even higher at night!

Therefore, I would suggest that you get any groceries you might need in other grocery stores, like Bónus and Krónan. These stores have branches downtown, and they are much cheaper than 10-11, making them much more suitable for budget travelers even though they are not open 24/7.​

what are some cheap tours in iceland?

You might be wondering if you can do any tours when you travel in Iceland for cheap. The answer is, of course! Keep reading to find out all the best tours you can do when you travel in Iceland for cheap!


Eating out in Reykjavik can be very expensive, especially if you want to try some local cuisine. What traveler doesn't want to try some authentic Icelandic food, though?

For some mouthwatering local dishes that won't break the bank, join our Reykjavik Food tour!​ Our top-rated tour will take you to Reykjavik's biggest attractions, as our guides will teach you a little more about Iceland's history and culture. Then, you will visit six restaurants, where you will try several different dishes, including a traditional Icelandic lamb soup and the traditional fish stew.

I would recommend either skipping breakfast or dinner that day, depending on the time of your tour, as there will be a lot of food to eat!​

For a full review and an account of everything I did at the Reykjavik Food tour, check out this blog!

Don't forget to book a spot in our Reykjavik Food tour here, as spots sell out fast!​


Women in a bar Reykjavik bar crawl

Are you more of a party animal? We got you covered! Our Reykjavik Beer tour and our Reykjavik Bar Crawl are two tours perfect for anyone who wants to experience Iceland's party scene!

As I mentioned earlier, alcohol is very expensive in Iceland. Just a pint of beer downtown can cost you around 10 USD, so partying downtown is not ideal if you are planning to travel in Iceland for cheap.

If you want to experience Reykjavik's nightlife (and make some new friends along the way!), then these two tours are for you!

For a more relaxed tour, check out our Reykjavik Beer tour, which will take you to all the best bars and pubs, where you can enjoy local beer, as well as light snacks.

For true party animals, we have our Reykjavik Bar Crawl! ​We will take you to our favorite bars and cocktail lounges, where you will try local cocktails, as well as seasonal beers and light snacks!


Whale Watching Iceland August

There is no bigger attraction in Iceland than its nature. And one of the Icelandic nature's best parts? Well, the whales, of course!

Iceland's climate and conditions make it the perfect home for several species of whales. In fact, you can even find whales in Reykjavik!

Our whale watching tour is one of the best tours you can do to get as close to these adorable giants as possible! We will take you closer than any other tour, and you also get a free re-do in case there are no sightings!

You can also get a heavily discounted admission to the Whales of Iceland museum, where you can learn more about the whales, and also be surrounded by life-size models​ that will make you feel as if you are swimming with them in the ocean!

Book a spot in our whale watching tour here!​

some tips from a local

Here you will find some more tips on how to travel in Iceland for cheap! Let's take a look!

  • Book everything well in advance. Tickets, entrance fees to attractions, and tours can often be more expensive​ if you book on the spot.
  • Take advantage of lunch offers and happy hour. Such offers can save you a pretty penny!
  • Take snacks with you on tours. Food outside of Reykjavik can be even more expensive!
  • Get a City Card. It will give you free access to most museums in Reykjavik, as well as the public transport and swimming pools, among other perks and discounts!

some final words

I hope you enjoyed this guide on how to travel in Iceland for cheap, and that it will help you have the best time on your trip on a budget!

Do you have any more tips for fellow travelers? Let me know in the comments! And, as always, share with anyone who might find it useful!​

Are you planning a trip to Iceland on a budget? Then this guide is for you! You may have noticed while you were booking tickets and hotel rooms that Iceland can be very expensive. So, in this guide I will show you how to travel in Iceland for cheap!


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