As we started planning a 3-week trip to Iceland for our anniversary last year, one of the first things we saw repeated on the internet again and again was, “Iceland is EXPENSIVE.” But as notoriously frugal travelers, we decided to interpret that warning as a challenge.
While the daily budget for Iceland quoted by other travel blogs is north of $300 per person, we managed to have an awesome trip for less than half that amount using a few simple travel hacks. If you’re looking for a cheap trip to Iceland, here’s a quick guide on exactly how to make it happen (including our total Iceland trip cost).
20 Tips for an Affordable Iceland Vacation
Here’s a list of every travel hack we used to travel Iceland cheap for three weeks straight!
Finding Cheap Flights to Iceland
- Pick dates based on flights. — Instead of deciding on dates for your trip first and then searching for cheap flights to Iceland, do the exact opposite. Use the calendar view on Google Flights to scope out anomalously inexpensive tickets, and just fly on those days! You don’t have to be retired like us to do this, either. If you plan your trip far enough in advance, you can request time off work to match up with your cheap flights to Iceland.
- Price flight legs separately. — When you’re searching for flights, you may notice common “hub” cities that all available routes connect through. For example, our flight left from Tampa and connected in Boston before heading to Reykjavik. Sometimes, if you book each leg through the hub city as a separate one-way flight, you can actually score a better deal.
Using Iceland Rental Cars and Camper Vans
- Use a rental car aggregator. — After comparing prices directly between a few car rental companies, we found that they were actually cheaper when booked through Expedia. We just picked the cheapest listing (from a company called Go Iceland). By the way, manual transmission cars are very popular in Iceland, and if you can drive a stick, you’ll often get an additional discount for choosing one.
- Skip the car insurance. — All rental cars in Iceland come with legally required car insurance, so you can decline all optional insurance. And if you book your rental car with a credit card that offers additional rental car insurance for free, you’ll still get that extra coverage!
- Get a gas discount tag. — You can shave a couple of percentage points off the cost of fuel by signing up for a free loyalty program at one of the major gas stations like N1 or Orkan. If you ask your rental car company, they usually have one of these gas discount tags on hand to lend you for free. This won’t save you a fortune, but it’s worth a few bucks.
- Consider a camper van. — We love our camper van for affordable travel in North America, and there are tons of camper van rental companies in Iceland such as Go Campers, Camp Easy, Kuku Campers, and Cozy Campers. At first, the cheapest models available look at least a little less expensive than hotels and rental cars, but unfortunately, it’s harder to find free overnight parking in Iceland than in the US, and there isn’t a major gym chain like Planet Fitness to get cheap showers at every night, so you’re pretty much forced to pay for campsites. Vans also eat more gas than cars. Overall, renting a camper van in Iceland won’t be a huge money saver, but it’s definitely worth checking the math.
Getting the Best Iceland Hotels for Less
- Use a hotel aggregator. — We found that Hotels.com had the best inventory selection, and we were able to get a lot of really unique apartments, cabins, and guesthouses in one place at reasonable prices.
- Redeem credit card points. — Using a credit card churning strategy, you can score large sign-up bonuses redeemable for hotels (or flights!) ahead of any expensive trip. We keep a constantly updated list of our favorite credit cards on our Recommendations page.
- Negotiate hotels with cash. — We were sometimes able to negotiate way better hotel rates by offering physical cash as payment. For example, we booked one stay on Hotels.com for $112 USD per night, but by offering the owner cash in person, we were able to extend that stay for only 10,000 Icelandic Króna per night, which was equivalent to just $72 USD at the time.
Keeping the Cost of Food in Iceland Down
- Cook your own meals. — Restaurants in Iceland are ridiculously expensive (nearly twice the cost of dining out in the US). Our solution to this problem was to do exactly what we do at home: cook! We did a Costco run our first day in Reykjavik and got tons of great food cheaply. Then, we resupplied at local grocery stores like Bónus and Kronan as we circumnavigated the island. Staying in unique, independently owned cabins and apartments gave us access to small kitchens with cookware, stoves, ovens, and microwaves. Overall, the cost of food in Iceland is very reasonable if you’re just buying groceries and cooking them yourself.
- Drink tap water. — This probably goes without saying, but don’t pay for bottled water. Iceland has some of the world’s purest, best-tasting tap water. Just carry a reusable bottle, and budget zero dollars for beverages (unless you’re espresso addicts like us 😅).
- Never leave tips. — It’s not customary to tip for anything in Iceland (not even service at a restaurant).
Enjoying Fun Things To Do in Iceland
- Appreciate nature for free. — The one thing you came to Iceland for in the first place is pretty much completely free: nature. You can take in gorgeous, cascading waterfalls and sit for hours under the glow of the Northern Lights for zero dollars and zero cents.
- Only book tours if required. — You don’t need to book any tours in Iceland to have a great trip, but a few glaciers and ice caves require an official guide for access. If you can visit everything you’re interested in on your own, skip the tours altogether. It’s more fun to forge your own path, anyway.
- Look out for promotional deals. — It’s worth looking out for random promos when shopping for experiences. We wanted to hit up the Myvatn Nature Baths, so Lauren checked their Instagram and saw that they were selling gift cards for 30% off. We bought one on their website for ourselves and redeemed it for entry the same day. Don’t be afraid to get creative!
- Skip the souvenirs. — When it comes time to leave Iceland, remember that you already have plenty of free souvenirs in the form of pictures and great memories – so you can safely skip all the dumb stuff for sale in the gift shops.
Saving Money on Everything Else in Iceland
- Earn cash back with a credit card. — In general, you can pay for almost everything in Iceland with a credit card, and purchases made in Króna will automatically be converted into your home currency at a fair exchange rate. Just make sure yours doesn’t have any foreign transaction fees, and you can shave another couple of percentage points off the cost of your trip by using a card that earns cash back along the way. We keep a constantly updated list of our favorite credit cards on our Recommendations page.
- Exchange currency efficiently. — In case of an emergency, it’s not a bad idea to carry a little cash when traveling. Just make sure you don’t get ripped off. Instead of converting currency in advance at a bank or airport (which have terrible exchange rates), we used our Schwab Investor Checking debit card at an ATM in Iceland upon arrival, because it offers fair exchange rates and automatically refunds all ATM fees.
- Use free bathrooms opportunistically. — One thing we expected to be free was going to the bathroom, but we were wrong about that. Whenever you see a free bathroom at one of your stops in Iceland, go ahead and use it, because the next one you encounter might cost a couple bucks to enter.
- Share a single phone plan. — Rather than activating two international data plans, we paid for one and used that phone’s mobile hotspot feature to share its connection with the other. You can also skip the data plan altogether and just use WiFi, which is free at many establishments throughout Iceland. Just don’t forget to download your Google Maps before you start driving!
How Much Money For a Trip To Iceland?
Iceland has the third-highest cost of living of all countries on Earth, so you might think that even with all of the above travel hacks, an affordable Iceland vacation might still be impossible. Well, here are the numbers so you can decide for yourself…
Our Daily Budget for Iceland (November 2024)
Here’s our Iceland trip budget averaged out on a per-day basis…
- Flights — $41 per day, per person (greatly reduced by taking a longer trip)
- Hotels — $50 per day, per person (slightly reduced with a hotel credit card bonus)
- Rental Car — $15 per day, per person
- Gas — $10 per day, per person
- Dining Out — $10 per day, per person
- Groceries — $11 per day, per person
- Other — $7 per day, per person
- TOTAL COST — $144 per day, per person
Is Iceland Expensive?
While we beat other travel blogs’ Iceland vacation cost estimates by a factor of two, this was still our most expensive vacation of all time, on a per-day basis.
To put this in context, 20 days in Iceland actually cost us 20% more than the entire 43-day vacation we took to Canada in the same year. That’s 157% more per day! If you’re going for truly frugal travel, Iceland isn’t the first place you should look.
Fortunately, we don’t really worry about the cost of our vacations too much any more. Thanks to a combination of passive income from our investment portfolio, a tiny bit of part-time remote freelance work, and continual income from our post-retirement business venture, our net worth grew by nearly $5,000 while we were on vacation in Iceland. We got richer on vacation, and it’s not the first time!
With the right lifestyle design choices, you can get rich, work less, and travel whenever you want. Join us!
— Steven
* The $5,772 Iceland trip cost was calculated using “vacation-related” expenses only, so it doesn’t include “back home” expenses like our existing health insurance plan, condo association dues, homeowner’s insurance, etc. The later-quoted change in our net worth includes all of these costs.
