How to Do Iceland On A Budget

iceland waterfall

Oh Iceland, how I love thee. Let me count the ways. I have been rabbiting on about Iceland to anyone who will listen for this whole week, and my Icelandic word vomit shows no sign of abating soon. I want everyone to go to Iceland and experience an amazing holiday, just like I did, so I thought I would address one of they key concerns when it comes to this beautiful country: cost.

Iceland is renowned as an expensive country; since it has to import pretty much everything, things can get a little pricey. But, whilst the average price of a pint in a Reykjavik bar will rival those fancy London prices, it doesn't have to be extortionate to go on holiday there. For the sake of an example, this is what I spent on my four-night trip to Iceland:

  • Return Flight (Manchester - Keflavik) = £93.32
  • Accommodation = £95.50
  • Bag = £14.00
  • Airport Parking = £8.12
  • Car Hire = £41.05
  • Walkie Talkies (essential) = £4.54
  • Petrol = £16.76
  • Alcohol at Duty-Free = £18.00
  • Groceries = £30.00
  • Meal Out in Vegamot = £35.00
  • Coffee in Cafe Stofan = £4.00
  • Drink & Sushi in Koffin = £8.00
  • Drink and Mozzarella Sticks in Lebowski Bar = £8.00
  • Hot Dog at Bajaerinns = £2.50
  • Blue Lagoon = £50.18

Some of those are kind of guestimates based on the exchange rate, but overall I spent around the £400 mark for four nights, which is about what I'd expect to spend anywhere. And don't get me wrong, this was no back-packing, hostelling trip. Our accommodation was pure luxury (just take a look), we spend most nights drinking wine in the hot tub and at no point did I feel like I was missing out due to money concerns. So, how can you do the same?

group in iceland

1. Go in a Group

I love group holidays. I know they're not for everyone, but I can honestly say that if it had just been Paul and I on this trip, it wouldn't have been half as good. It would have also been twice (or thrice) as expensive.

Splitting the cost is a big factor when it comes to a group holiday. Having an eight-way split made the accommodation, car hire, petrol, groceries and airport parking all seem like a steal. Collectively, we spent a lot but when it was broken down into such small parts, it made the whole thing incredibly affordable.

We hired our cars from Greenmotion, and I'd definitely recommend using them if you're looking to do the same. They were cheap, but there was no scrimping on holiday. The lovely man who greeted us at the airport was actually a Leeds United fan, which is a bit of a strange coincidence, especially since none of us Leeds residents are! But other than that fun fact, the cars were affordable, sturdy and low carbon. Absolute winner. We travelled over 1000km in the four days that we were there, so having a good car is a definite must.

our view

2. Cook for Yourself

We hired our house from airbnb, and not only was it the most beautiful home I have ever stayed in, as well as having an open fire and a hot-tub on site, it also meant that we could cook for ourselves and cut down on the costs of eating out. We did go for one lovely meal on our last night, as well as for a few snacks out and about, but really I didn't spend much more on food than I would when I'm home here in Leeds.

If you do take this option, especially if you're staying somewhere more rural, make sure you pay attention to supermarket opening times because you don't want to be stranded in the middle of nowhere with no food! Bonus is the main supermarket, as far as I can tell, with a few branches in Reykjavik as well as some scattered around in the sticks. They also have a website where you can check locations and opening times.

open fire

3. Buy Alcohol at Duty-Free

Keflavik airport is one of the only ones in the world which has duty-free on your way in to the country, as well as on the way out. And actually, the one on the way in is much bigger and fancier. This is because alcohol is so expensive in the country, and can only be purchased at special government-controlled shops (and bars and restaurants, obvs) rather than in supermarkets. What?!

So stock up in duty-free and save yourself the expense and the hassle. We actually ended up buying way too much and had to leave a bunch of lager at the house for the next people to enjoy. So even if you buy your full allowance, you'll probably be fine! I just popped my half-finished bottle of gin in my suitcase - there's no situation where gin doesn't win.

4. Go Off-Season

Iceland doesn't really have an off-season but there's no denying that it's a bit more appealing in summer - the weather is better and you're less likely to be trapped in a snow drift. We went at the end of September/early October, which made the flights cheaper. It was pretty nippy, and the week after we went the country was covered in snow, but you don't exactly go to Iceland to sunbathe, do you? Plus, you're more likely to see the Northern Lights between September and January. Do a bit of research on when flights are cheapest and you could end up bagging yourself a bargain.

5. Do Your Research

Buy yourself a guidebook and be savvy about where you eat out and what attractions you go to. If you're on a budget, doing you research on whether particular attractions are value for money or not can help you decide your itinerary in advance and mean you're not disappointed.

We used our guidebook and a book of restaurants picked up from the tourist shop in Reykjavik to decide where to eat on our last night. A little bit of Googling for menus and some cross-referencing later, we'd picked a restaurant which was delicious but didn't break the bank. Well worth the little bit of extra effort.


6. Take Advantage of the Free Attractions

Everything in Iceland feels like a tourist attraction. It's so different from anywhere I've ever been or seen, so just driving along the road has you cooing and stopping to take pictures. However, many of the 'real' tourist attractions are free to visit so you can have your fill without spending a penny (so to speak). We didn't pay a thing to visit The Golden Circle attractions (Thingvellir, Gulfoss and Geysir), all of which were amazing and which took up a full day of sight-seeing. Wandering the streets of Reykjavik is also free, and the best bargain of the holiday was the hot dog at Baejerinns - it was cheap as chips and you'll be craving it for weeks afterwards.

blue lagoon

6. Splurge Where It Counts

You might only go to Iceland once in your life, so don't forget to have a little fun! The Blue Lagoon is pricey and is a known tourist-trap but it is so worth the money. A little tip though - you probably don't need to pay the extra for the dressing gown! If I was to go back, I'd also love to splash out and have a meal at Fish Market. The menu looked dreamy and when we walked past the restaurant it was super stylish; sadly, the group's budget concerns came first!