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Iceland is known for being one of the most expensive countries in Europe. Not only are the costs of food and travel within the country expensive but there are lots of attractions and activities to see and do too, all of which cost money.
But can you do Iceland on a budget? I visited Iceland during winter and tried to save money on activities, travel and food and drinks.
Read on to find out how much I spent on a weekend trip to Iceland.
Do you need cash for Iceland?
I try not to exchange currency when it’s a country that I won’t be visiting often, as I find that you end up exchanging too much and coming back with leftover money. Because of this, I did some research before I travelled to see if I would need any cash for my trip.
From my Googling, it seemed like everywhere in Iceland would take credit card so I didn’t exchange any currency in cash and this turned out to be a great decision. Everywhere I went during the weekend accepted credit card and I didn’t need any cash.
When I travel abroad I use my Halifax Clarity Credit card as it has no charges for using it abroad and it has preferential exchange rates. If you’re given the choice, be sure to choose the local currency as this always gives you the best rate and you end up paying less.
How much I spent on flights
Travel to Iceland is one area where you can really save money. Cheap flights to Keflavik International Airport are available from a variety of UK airports with budget airlines like Ryanair and easyJet.
I flew with easyJet and it cost me £108 for a speedy boarding flight which includes a 10kg carry on case. You could save more if you travel with just a backpack.
Flight costs: £108
How much I spent on transfers
There are a few different ways to get from Keflavik International Airport to Reykjavik once you arrive in the country. You can get a taxi, hire a car, or book a transfer.
If you don’t need a car during your stay then probably the most cost effective way to get to Reykjavik is by booking a transfer with a coach company. This cost me £34 and took around 45 minutes to get to the BSI bus terminal.
Once you’re there, a lot of accommodation is within walking distance, or there are other buses to take you closer to your hotel and these are included in your transfer price.
Transfer costs: £34
How much I spent on accommodation in Reykjavik
Accommodation was the biggest cost for my weekend in Iceland, especially as I travelled to Iceland on my own. I booked one of the cheapest options available on Booking.com, Baldursbra Guesthouse Laufasvegur, hostel-style accommodation in central Reykjavik.
The accommodation was around £100 per night and was very basic but I did have my own room with a shared bathroom on the same floor. There were shared kitchen facilities here which means you could save even more by preparing your own meals.
Read my review of Baldursbra Guesthouse Laufasvegur for more information.
Other budget options include Loft – HI Hostel (part of the Hostelling International network) and Laekur Hostel.
I find budget accommodation on Booking.com by filtering the results by the review scores and then sorting by price. I only stay in accommodation where the review scores are 8 (good) and above.
I also look at the reviews to check that the location is mentioned. This is important as it can save you money on transport if everything is within walking distance.
Accommodation costs: £300 for three nights
Book Baldursbra Guesthouse Laufasvegur
Trip costs
Another pricey section for your Iceland budget is the cost for day trips but this isn’t an area where you’ll want to scrimp – this is what you came for, after all! A couple of my trips (South Coast and whale watching) got cancelled which meant that I didn’t spend as much on trips as I was planning to.
I did the Golden Circle and Northern Lights tour, a combination tour with a day trip to Thingvellir National Park, Geysir geothermal area, and Gullfoss waterfall and a night-time northern lights hunting trip. Both of these things I have wanted to do for years so I was happy to spend money here.
I also spent around £8 to go to the top of Hallgrimskirkja church in Reykjavik city centre. I thought this was quite good value and you get an excellent view over the rooftops of Reykjavik.
To save money on trips, try shopping around to find the best deal but make sure you check what’s included as some trips may differ.
Trip costs: £108
Book Golden Circle and Northern Lights tour
Food and drink costs
Although I do love a good meal (and a couple of drinks!), food and drink was an area where I tried to save, despite it being expensive in Iceland.
During the day, I made sure to take my refillable bottle everywhere with me. The tap water in Iceland is safe to drink, and it’s one of the cleanest drinking waters in the world so there’s no need to fork out for bottled water.
It isn’t treated with any chemicals, it’s pure natural spring water filtered through layers of lava and rocks, so it also tastes delicious!
I ate at a variety of places in Reykjavik including The Laundromat, Lebowski Bar and the Reykjavik Fish Restaurant. I found alcohol to be very expensive with the local beer being one of the cheapest options.
One of the cheapest places to get food is the Baejarins Beztu hotdog stand where hotdogs cost around £4.
The hotdogs are a mixture of lamb, beef, and pork, and it is one of the most popular spots in Reykjavik to grab a bite to eat. If you’ve got a packed day of sightseeing it’s a great option, rather than indulging in a sit-down meal.
If you choose self-catering accommodation, you can save more on food and drinks costs by preparing meals there, rather than eating out.
Food and drink costs: £120
Do you need to tip in Iceland?
I googled whether you need to tip in Iceland before I visited. The rules are different in every country you travel to, so it’s good to know before you travel so you don’t make a faux pas.
There’s no need to tip in Iceland. Icelanders salaries are high and there is no obligation to leave a gratuity at restaurants, hotels, or to trip guides.
Of course, if you receive excellent service and really want to leave a tip, you absolutely can, but don’t feel like you need to.
