Iceland on a Budget tips

The last few years, Iceland has jumped straight to the number one country on almost everyone’s bucket list. With its insane landscapes, friendly locals and incredible natural phenomenons (did someone say hot springs?), it’s no wonder we’re all jumping on the plane to Reykjavik. Time and time again though I hear the same criticism of this beautiful country: it’s just too damn expensive. Well…  yes, you will be paying a little more for your fermented shark (Iceland’s National dish) than your typical food in somewhere like South East Asia or Eastern Europe, but don’t let that stop you! If you’re looking to travel this amazing country without the expensive price tag, then we’ve got you covered! There are plenty of amazing experiences to be had in Iceland on a budget – even some that won’t even cost you one Icelandic Krona.

Iceland on a Budget tips

Drink the tap water

Put DOWN that bottle of Voss! Not only can you drink the water in Iceland, but you should! Iceland’s water is so pure that you can pretty much drink straight from any free-flowing stream you come across. Ok, so I’m no scientist, but my understanding is that it’s alkaline water, which means it has a pH level above 7 and will keep that body of yours healthy AF! It’s not chemically purified as that’s already covered by the lava filtration. So ditch the expensive bottles and get back to nature.

iceland on a budget @suetzi.sherin water

📷: @suetzi.sherin

Stay at a hostel

If you want to enjoy Iceland on a budget, then it should go without saying that you’ll need to find some cheap accommodation. Luckily, Iceland has some awesome hostels spread around the country, which makes your road trip budget even better. I stayed at the Bus Hostel in Reykjavik, which features some seriously 70s chic vibes and possibly the comfiest blankets you’ll ever find in a hostel. Kex Hostel, housed in an old biscuit factory, is also a great choice in the capital if you like your accommodation to have a quirky style, or perhaps try the Hoscar Award winner Loft-HI-Hostel if you want to try spotting the Northern Lights from its rooftop terrace! Akureyri (known as the capital of the north) is another popular town to visit, with the Akureyri Backpackers charming everyone who stays here, whilst Midgard Base Camp in Hvolsvöllur is the perfect hostel for checking out Skógafoss, Seljalandsfoss and the black beach in Reynisfjara.

iceland on a budget @likealocaltravel Bus Hostel

📷: @likealocaltravel

Make friends and cut down on coach trips

If you’ve done your research on Iceland you’ve definitely put the Golden Circle on your To Do List! What a lot of people don’t know though is that all three attractions that make up the Golden Circle are actually free. To save on costs, get some of your hostel buddies together and hire a car for the day. You’ll drastically cut down on your spending and still get to see Geysers erupt, Waterfall’s creating rainbows and incredible sunrises over the Thingvellir National Park free from entry costs!

iceland on a budget @likealocaltravel Golden Circle Tour 3

📷: @likealocaltravel

Buy your alcohol Duty-Free

If you’re planning on trying out some of Iceland’s local bars, you’ll be surprised to discover that alcohol is quite expensive. That’s because drinks of the boozy variety are heavily taxed, which isn’t great news for budget travellers. So what can you do? Buying a bottle Duty-Free (either at your departure airport or when you arrive at Keflavík) is your best option, as it means you can have a drink or two before you go out. Alternatively, keep an eye out for bars with Happy Hour – as long as you’re aged over 20. Yup, Iceland’s drinking age doesn’t extend to 18 or 19 year-olds, but at least you’ll save more money this way.

iceland on a budget @realedebora alcohol

📷: @realedebora

Skip the Blue Lagoon and try Landbrotalaug Hot Springs….

You’ve probably seen the ridiculously picturesque pools from the famous Blue Lagoon Hot Springs. While these springs will take your breath away, they’ll also get in the way of your plan to explore Iceland on a budget. Why not ditch the expensive man-made pools and immerse yourself in a free natural hot spring instead? The country is littered with plenty of completely free thermal springs. My favourite natural spring is Landbrotalaug, located about 2 hours north of Reykjavik. Here you’ll find one small, deep spring that looks a bit like you’re soaking in a witch’s cauldron and a second larger, shallower spring. If you’re lucky and no one is around you can go al naturale… Just make sure you can grab your clothes easily in case a big group of Russian men rock up. That was awkward for all involved.

iceland on a budget @likealocaltravel Landbrotalaug Hot Spring 2

📷: @likealocaltravel

…. or Hveravellir Hot Springs!

You didn’t expect me to write about only one hot spring now did you? Located between Langjökull and Hofsjökul glaciers you’ll find Hveravellir, a unique nature reserve with a man-made pool heated by volcanic activity. This geothermal pool is just sitting in the middle of nowhere, which gives it this mysterious and enchanting vibe. The beautiful water colour is almost begging you to jump in and enjoy the natural heating! You can fit about 20 people in here, so get a road trip going with your new hostel buddies and soak up those medicinal properties in the water. Perfect for curing the hangover caused by too much Brennivín, Iceland’s signature liquor.

iceland on a budget @stekyszabo Hveravellir

📷: @stekyszabo

Pick up local treats at the flea market

If you find yourself in Reykjavik over the weekend, stop by Kolaportid Flea Market! Flea markets are one of my favourite places to people watch and stroll around looking at all the weird and wonderful things people have collected. It’s also one of the best ways to see Iceland on a budget, because it’s free! Pick yourself up a genuine Icelandic sweater, find a vintage hat or check out the hand-made jewellery. It’s all undercover which makes it the perfect rainy day activity. There’s a food area in the same building where you can sample delicious items like black lava salt or kleinur (Icelandic donut). It’s also the best place to buy your fermented shark, because you know, when in Iceland…

iceland on a budget @likealocaltravel Flea Market

📷: @likealocaltravel

Free things to do in Reykjavik

Einar Jónsson Sculpture Garden

Sometimes it’s nice to get a bit of art and culture without the price tag. Good news! You’ll find a free sculpture garden hidden behind the Einar Jónsson Museum (whose entry cost is 600 ISK – that’s about €4.5 EUR or $7 AUD). The garden contains twenty six of Einar Jónsson’s bronze cast sculptures, which he gave as a gift to the Icelandic people. The garden is right next to Hallgrímskirkja (that really big church) so it’s super central and easy to find.iceland on a budget @aludeawakening sculpture

📷: @aludeawakening

The Sun Voyager

Artist Jón Gunnar Árnason wanted this sculpture to be ‘a promise of new, undiscovered territory’ and a symbol of ‘light and hope’. Over time this sculpture has become instantly recognizable as a symbol of Reykjavik, standing proudly overlooking the ocean. Take a stroll down to the water’s edge in Reykjavik and watch the sun set across the sea and behind the mountains for the perfect ‘make your friends jealous because you are in Iceland’ shot.

iceland on a budget @jcstomper sun voyager

📷: @jcstomper

Street Art

While Reykjavik might not be ready to rival Berlin’s street art scene, for such a small city it is quickly becoming a top contender. This should definitely be part of your Iceland on a budget itinerary. You can spot countless wall murals taking up entire buildings on just a short stroll through town. A lot of the work is commissioned by the city, while others are anonymously done in the cover of darkness. One of my favourite pieces is part of a collaboration called ‘Wall Poetry’ which combines street art and music, questioning how these creative processes interact. So put on your good walking shoes and take yourself on a self-guided tour through the city streets in search of some of these amazing pieces.

iceland on a budget @anneofgreatmistakes street art

📷: @anneofgreatmistakes

The Harpa Hall

Sitting quietly on the edge of the city you’ll find the unique Harpa Concert Hall. It’s dramatic and angular structure makes it really quite intense from the outside. However, the tessellated and minimalist interior is a great place to people watch and check out what shows are coming to Iceland. If architecture isn’t really your thing, maybe you’ll like the fact that this building starred in the latest series of ‘Black Mirror’?

iceland on a budget @likealocaltravel Harpa Hall 1

📷: @likealocaltravel

Elliðaárdalur Valley

Hidden in Reykjavik’s city centre you’ll find the hidden gem, Elliðaárdalur valley. Perfect for enjoying a stroll, taking some snaps or exploring the wildlife. There are plenty of little paths with the stunning Elliðaá river winding through. Ideally, cut down on food costs by bringing a little picnic with you!

iceland on a budget @torykvinna bunny

📷: @torykvinna

Catch a Glimpse of the Elusive Northern Lights

You’ve probably seen advertisements for the northern lights tours and already decided they are out of your budget. I agree, who would want to fork out all that Icelandic Krona in case the lights don’t even show! Unfortunately, natural phenomena’s can be like that.. mother nature can be selfish really. An expensive out of town tour may give you a good chance to see the lights, but if your plan is to see Iceland on a budget, why not do the D.I.Y version and head down to the Grótta lighthouse on the Seltjarnarnes Peninsula in Reykjavik. This is the best spot in the city to try to spot those sneaky lights!

iceland on a budget @rachatimee northern lights

📷: @rachatimee

Get a Free Foot Spa

If you head to the Seltjarnarnes Peninsula during the day you’ll be able to find a little hot spring perfect for dipping your tired feet in! Ok, no one’s going to give you a pedicure, but still, after a day of exploring the city, it’s heavenly to rest your tied toes while staring out over the Atlantic. This is also a great place to bird watch as there’s plenty of species that frequent the area.

iceland on a budget @mariatius foot spa

📷: @mariatius

Free things to do in Iceland on a Budget

Reynisfjara Black Sand Beach

Now, being from Australia I’m the first to admit to being a bit of a beach snob. I’m used to pearly white sand and crystal blue water. So when someone told me about the black sand beach I wasn’t all that excited. Well. I. Was. Wrong. This place is a photographer’s paradise, plus there’s no better way to enjoy Iceland on a budget than a bit quality time with your camera. You’ll find black sand all around the country, but the most iconic area is located in the south of the island, called Reynisfjara beach. The pitch black colouring due to lava and the angular basalt rocks that surround it gives this beach an eerie vibe perfect for a moody Instagram post. Locals say that the creepy rocks that tower the beach are actually petrified sea trolls that were trying to steal a ship! Or maybe it’s just from lava flowing, cooling, and cracking into hexagonal shapes. I guess we’ll never know for sure.

iceland on a budget @likealocaltravel Black Sand Beach 2

📷: @likealocaltravel

Abandoned Plane

I’m not sure why, but I find abandoned sites just so hauntingly beautiful. Close by Reynisfjara beach, lying forgotten on the black sand is the wreckage of a US DC-3 Airplane. Amazingly, everyone on board survived this 1973 crash and it now rests alone just waiting for photographers to come and capture its beauty. It will take you about an hour to walk to the wreckage, but in my opinion, it’s well worth the trip. Be careful if you decide to climb inside: it’s a crash site so there are lot of wires and old metal in this wreckage. Depending on your taste in music you may be enthusiastic to find out that it featured in Justin Bieber’s ‘I’ll Show You’ video clip. Or maybe that will make you like it less. Whatever, just don’t skateboard down it like he did. Not cool, Biebs.

iceland on a budget @likealocaltravel Abandoned Plane

📷: @likealocaltravel

Meet an Icelandic Horse

I feel like there’s still an 11-year-old girl in me that just wants to be friends with a pretty horse. Icelandic horses kind of look like fat little pony’s, since the breed has a thick coat and is considerably smaller than common adult horses. Plus they just look so damn majestic against the intense Icelandic scenery. Don’t go jumping any fences (Icelandic people are so nice, so don’t go disrespecting any farmers you hear!) but if one happens to walk up to the fence line, then a little scratch behind the ear should be fine. Unfortunately, I think security will find out if you try to smuggle one home with you though.

iceland on a budget @likealocaltravel Iceland Horse

📷: @likealocaltravel


About the author

Alex Nissen is just a girl from the most isolated city in the world gallivanting her way across the globe. Check out her adventures at or on Instagram.