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Planning a Trip to Iceland on a Budget: Things to Know Before you go

jokulsarlon iceland diamond beach4

One of the things I say on my About Page is that  I make mistakes so you don’t have to – and I actually made a big mistake in Iceland. Well, it wasn’t actually a mistake, because I knew I had to hit up one of the big grocery stores before leaving Reykjavik because big supermarkets are sparse on the island, and we wanted to pick up food to make picnic lunches during our road trip – restaurants in Iceland are pricey.

And that’s what we did, we went to the first Bonus supermarket we came across, ready to load up the car with groceries. Only that the supermarket didn’t open until 11am (!), and we were there at 9am. So we decided to head off on the first leg of our road trip, assuming we’d be coming back through Reykjavik after driving the Golden Circle. But we didn’t. We headed straight south. And were stuck with a small town grocery store in Vik, with a very limited selection.southern iceland mountain roadI put together some other things I’ve learned on my road trip through Iceland to help save you money during your trip, to give you an idea what to expect in regards to how much things cost, and last but not least – some thoughts on renting a car for your trip vs. using public transportation or hitchhiking.

Budget Tips for Iceland

Don’t pay for water

I was surprised when I read on other blogs that travelers had paid for water in Iceland. Icelanders pride themselves for having some of the best water in the world! It comes straight from a spring and is delicious – why would you pay for bottled water?! Plus, you won’t contribute to plastic bottle garbage.iceland drinking water loft hostel

Shop at grocery stores and make picnic lunches

If you’re on a budget, you won’t be able to afford much more than the famous Icelandic hot dogs, which are available on hot dog stands in most places for ISK350 – 380 (US$2.70-$3). Whenever we decided to eat out, we were shocked by the prices on the menus. Restaurants in Iceland sure aren’t cheap! A pizza would usually start at around ISK2,000 (US$15.50) a burger around ISK1,900 (US$15), a vegetarian pasta dish around ISK2,200 (US$17)*.

*The exchange rate used is from February 2016.

skyr iceland
Our daily picnic lunch: Icelandic skyr, a thick Icelandic yogurt

To give you an idea what other things in Iceland cost:

Coffee is between ISK350 and 500 /US$2.70 – 3.80 (a little more for cappuccinos, lattes, etc).

Beer starts at ISK800 (up to 1200) /US$6.20-9.20, but if you buy a can in the supermarket, it will cost around ISK350 /US$2.70 (for 500ml). Tip: If you’re renting a car at the airport, you might want to consider picking up beer in the Duty Free Shop. A six-pack of 500ml Viking beers is around ISK1,500 /US$11.55.

icelandic craft beerGas was ISK204/US$1.57 per litre when I visited in September 2015. That’s nearly US$6 per gallon!

The bus from the airport into Reykjavik is 1,950/US$15, cabs from the airport are around ISK12,000/US$92.

Activities are quite pricey: the Blue Lagoon starts at 7,000 (US$54), whale watching at 9,000 (US$70), a Golden Circle Tour ISK10,000 (US$77).

To get an idea what other groceries and entertainment in Iceland cost, check out this article on the cost of living in Iceland.

Note that there is a big difference between high season and low season prices for rental cars and accommodation!

Where to shop

Kronan, Bonus and Netto are the cheapest supermarket chains in Iceland.

Tipping

Tipping is not customary in Iceland, so save your change!iceland coffee stop

Cash vs. credit cards

I have to admit that I didn’t take out cash at all while I was in Iceland – I paid with my card everywhere! And not once was I unable to buy something because I didn’t have cash, cards were accepted in all the stores and restaurants I went to, even a small coffee shop in a tiny village along the way.

SIM card

A SIM card with some data is useful if you want to look up directions or call a hotel/hostel or use a road map app, a weather app or the northern lights forecast website. The Duty Free Shop at the airport sells Siminn SIM cards, which have the best coverage in Iceland, with 1GB data, 100 minutes and 100 text messages for ISK2,990 (around US$23). A Vodafone SIM card can be bought at the same shop for half the price, ISK1,500 (US$11.85), containing 300MB data and ISK1,000 credit. If you don’t need any of these things, you’ll be totally fine with wi-fi, available in 95% of all guesthouses, I’d say, and also in most cafes, restaurants and gas stations.iceland lake

Other Things to Consider…

When to go

I would recommend visiting in the shoulder season – May or September. That way you can avoid the crowds that have flooded Iceland during the summer months in recent years since it has become such a popular destination, but you can still enjoy the activities that shut down in the winter months, like glacier boat tours, paragliding, snorkeling/diving in Silfra, or whale watching tours. Also remember that if you visit in the winter, you have considerably less hours of daylight than in the summer, which makes a big difference when mapping out a driving route.Akureyri harbor

Weather

I thought I knew crazy weather from living in Britain but Icelandic weather easily tops that. We often woke up to rain and cloudy skies, and a couple of hours later the sun was shining. Or I would start driving in the morning with blue skies and then drove straight into rain. If you wake up to rain, don’t be fooled and think you should stay in – I guarantee you that the weather changes several times during the day. Vedur.is is the best weather resource for Iceland.

glacier lagoon ice iceland dani
You can’t really tell in the photo, but it was pouring down when we stopped at the glacier…

Road trip vs. Public transportation vs. Hitchhiking

Self-guided vs. guided

As soon as we hit the road and saw tour buses by the dozen, I knew we had made the right decision going with an Iceland self-guided tour – it gave us the exact amount of flexibility and independence that we needed, and yet it was comforting to know that we didn’t need to take care of our accommodation. The places we slept at were all vouched for and in a strategic location for each day’s route, but I could decide how to plan the route, how much time to spend in each place, if we wanted to stop in other places along the way, or if we wanted to skip some of the suggestions in the itinerary. After all, I didn’t need to follow each day’s schedule to a tee.

dani grabrokargigar
A spontaneous stop at the volcano craters of Grabrokargigar – only possible because we were on a self-guided drive!

And I was more than happy to have the flexibility to spend as much time as I wanted in places like the magnificent Jokulsarlon Glacier Lagoon, instead of being herded back on the bus like most other tourists there. Or to decide to turn off and follow an unpaved road, only to find another glacier lagoon, Fjallsarlon, also stunning and well worth the little detour, which we couldn’t have taken had we been on an organized group tour.

Iceland by rental car

If you don’t mind mapping out your road trip route yourself and booking your accommodation, there are plenty of car rentals available at the international airport. I never felt uncomfortable driving in Iceland, but you might find the narrow mountain and coastal roads a little intimidating if you’re only used to driving multi-lane highways in the U.S. However, I wouldn’t trade in driving myself for anything else – it just gives you so much freedom. I shared some driving tips for Iceland here. If you don’t need the comfort of a hotel bed, you can also rent a camper van, by the way. My friend Matt explored Iceland in a Happy Camper and seemed to have enjoyed it.

waterfall selfies iceland
You’ll want to be able to stop at Iceland’s gazillion waterfalls!

Iceland by public transportation

Iceland doesn’t have a rail network, but there are buses that connect the major towns. However, the bus schedule is quite limited and it will only allow you to get from city to city instead of stopping at all the waterfalls, geysers and glaciers you want to see on a trip to Iceland. Keep in mind that the bus schedules are even more restricted during the off-season. For bus schedules during the summer months (including prices), check out Iceland On Your Own, who also offer a passport that offers discounted travel in several regions of Iceland. Their detailed bus schedules can be found here. Instead of traveling Iceland by public bus, consider hitchhiking:icelandic horses
Hitchhiking in Iceland

Hitchhiking in Iceland is adventurous, but it’s much more common than in the U.S., for example, and we came across quite a few hitchhikers – and even picked some up along the way. For us it was a fun way to meet other travelers and hear their crazy stories (a couple we picked up was nearly blown over a cliff in their little tent on a stormy night). It’s definitely doable to circle Iceland on the Ring Road by hitching, but be aware that in some remote parts, it can take a while until somebody picks you up (hours!) and as I said before, the weather changes rapidly, so you might be standing in the rain for a while in a country that is chilly year-round. If you’re thinking about hitchhiking in Iceland, check out the Hitchwiki for IcelandDawn shares her hitchhiking experience in detail here, check it out to get an idea of what to expect.icelandic scenery
Ride sharing in Iceland

Ride sharing is a popular way of traveling in Europe. If you are the one with the car, you can post the ride you’re planning to take on a ride sharing website, including how many seats are available and how much you charge per person. It’s a great way to get some money for gas.

People in need of a ride can post the details of the ride they want to take on this website, and car owners who are heading that way can respond to your post. Another website that lets you post the rides you require or you offer is Carpoolworld Iceland.

iceland rental carCheck out the highlights from my Iceland road trip here:

Icebergs, waterfalls, geysers & lava fields: Highlights from an Iceland road trip

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2 Comments

  1. WOW, so exciting. Great info re prices to give us an idea of what to expect. I don’t think we will have time to hire a car and do our own thing that you clearly recommend, I expect visiting via a cruise ship there will be a huge amount of bus tours ‘sheeping’ people around. Not sure what we will do, the sheep method doesn’t excite us. Possibly find a smaller tour group more bespoke 🙂

    1. Thank you, John 🙂 I was on a cruise once and there were car rentals available right on the pier when we exited the ship. Maybe that’ll be the case on your cruise too? I highly recommend renting a car and seeing the island by yourself – at least a little bit of it. That way you’ll have the freedom to stop wherever you want instead of being sheeped around 😉

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