If anyone knows anything about Iceland, it’s that it had a really big volcanic eruption that ground Europe to a halt in 2010 and it’s expensive. Maybe you also know it’s fucking beautiful, but if you don’t, we’ll get to that.

Moody Snaefellsnes Peninsular

Like most Northern European countries, taxation on things is high, so travel can be costly.

However, like most deceptively expensive countries; if you’re a local, earning local money, it’s a pretty good life. My theory on how expensive a country is, is only based off how much you can save in monthly salary. In Iceland? I think it’s a good quality of life.

Which is why, in the beginning of 2014, I decided to try and bag myself a job for the summer. I figured if I could spent 3 months earning some local Krona, I could then see a country I so desperately want to visit and balance the (usually) inhibitive costs to neutral.

Needless to say, on Icelandic wages, I not only easily paid for a 2 week trip around Iceland, I got to see some sights during my 3 months at a guest house and took some money to my next destination!

Perhaps most invaluable of all, I had 3 months to pick everyones brains’ about where I should go and how best I could travel on Iceland, on a budget.

After putting those tips in to practice, I’ve come up with a breakdown on how best to save money travelling in Iceland. I’ve broken it down in to easy to use sections. Lets start with..

TRANSPORT

Hitchiking – Cost: Free
Iceland, in the grand scheme of things, is ridiculously safe for hitchiking. It is extremely common and I met many travellers who used this exclusively as their mode of transport. It also enables you to meet locals or other travellers. If there’s cars and they have a spare seat, it usually doesn’t take very long before someone will pick you up.
On the plus side.. Good if you have plenty of time on your hands and are willing to camp, go with the flow, freestyling it.
On the not so good side.. Bad if you like planning and have limited time.

JUST HOW SAFE IS IT TO HITCHIKE IN ICELAND?
I did hear of one horror story whilst I was there: a solo female getting in to a car with a weirdo. She managed to get away from him, but only because she had some knowledge of the local area. As ever one can’t take an entirely blasé attitude and should practice sensible precautions, like avoiding nighttime (evenings are particularly quiet in rural Iceland) and nobody knowing where you are. Pick up a local SIM card so (if there’s signal!) you can tell your friends/family your travel plans, and always take a pic of the car registration plate before you get in.

Hiring a car – Cost: Anywhere from 30 to 150 euros per day
Personally, if you want to get the most out of your time, I think hiring a car is the way to go. Convince some mates to come to Iceland and split the costs. Hiring a car needn’t be as horrifyingly as expensive as you might think. The best thing you can do is shop around! I heard of a huge price variations, from 30 euros a day to 150 euros a day, often for similar vehicles. If you’re an explorer and plan to stray off Route 1, it’s worth paying for a 4×4 – there’s a lot of gravel roads in Iceland.
On the plus side.. You have no time restraints, you can stop whenever you want to look at the view (and trust me, you’ll want to!) and sometimes there’s the possibility of cutting costs further by using car share websites to help pay for petrol (if you have a spare seat).
On the not so good side.. It can be expensive, especially if you’re travelling alone, and you need to be comfortable driving on some scary mountain roads (especially if you venture to the west fjords!).

Organised Tours – Cost: Varies wildly, but starting from 80 euros and up
You can see a lot on organised tours, especially if you’re short on time and can’t afford the outlay for a car by yourself. However, if you’re seriously considering going for a couple of weeks, do the maths and compare how much it would cost you to do the tour vs hiring a car. They generally end up similar in price, yet I think you get better value for money from a self-drive because you can stop whenever you want and it’s so fun adventuring in such a safe country!
On the plus side.. Good if you’re a nervous driver and want to have a readymade group to hang out with. Ideal if you only have a few days and just want to do the Golden Circle or a small part of Iceland (e.g. south coast or Snaefellsnes peninsular).
On the not so good side.. Fixed itinerary, can’t stop when you want to snap the view, being stuck with the same people isn’t always a good thing, and tours can be more expensive than doing it independently, especially if you’re there for 2+ weeks.

Public Transport / Car Sharing – Cost: Starting from a 5 euros and up
Iceland has a reasonable bus network and offers good car sharing websites. Between these two, you can cover most of the country. Definitely cheaper than independent car hire, but obviously not as cost effective as hitchiking.
On the plus side.. Cheaper than car hire and allows better planning than hitchiking.

On the not so good side.. Can be time consuming to meet your car share driver or find a ride in the first place. Annoying to be constrained to a bus timetable, especially if the bus stops semi-frequently.

NUMBER 5? CYCLING AROUND ICELAND?
For some reason, unbeknown to me, there is quite a lot of people who think it’s a marvellous idea to cycle Route 1. I say, they’ve never seen the winds in Iceland before or the very small width of the roads. It’s not uncommon for locals to think of a ‘strong breeze’ as 60mph, and there are stretches of many kilometres where it is impossible for a motorist to safely pass a cyclist. If you want to cycle in Iceland, great! But, seriously reconsider Route 1 and the weather conditions you may be facing, before booking your ticket.

ACCOMMODATION

We rented this amazing cabin near a stunning lake in East Iceland, thanks AirBnB!

Hotels – Cost: Starting from around 150 euros per night and up
There are some stunning hotels in Iceland and new, fancy ones are being built all of the time to meet tourist demand. However, the cost is usually so expensive it might make your eyes water.
On the plus side.. You can stay in some beautiful places, with views over incredible landscapes and enjoy a very unique getaway.
On the not so good side.. Your wallet is going to seriously suffer. Do your research as some hotels in Iceland are just downright overpriced for what you get!

B&B and Guesthouses – Cost: Starting from around 60 euros per night and up
This is a pretty broad spectrum of style of accommodation, as in different areas the definition of a B&B/Guesthouse varies massively (and they are most definitely not the same as an Icelandic definition of a “Hotel” – very separate categories!). If there are 2 or more of you travelling together, this is a great area to cut accommodation costs, as sometimes you can bag a room for 3 or 4 people, for little more than you’d pay for a double. Some accommodation also offers a price reduction if you bring your own sleeping bag.
On the plus side.. Even if you end up spending a bit more than you’d hoped, you can still save by using guesthouse cooking facilities to make a picnic and dinner.
On the not so good side.. As with hotels, some places are significantly better value for money than others. Price doesn’t necessarily denote quality in Iceland, so shop around by area.

TOP ACCOMMODATION TIP

Always email the smaller guesthouses directly for their best price and avoid the likes of Booking.com who take a percentage from all bookings. Especially important if it’s the low season; you’ll almost always get a discount by emailing direct.

Hostels – Cost: Starting from around 30 euros a night and up
Disappointingly rare outside of Reykjavik. The closest thing you might get away from the city is some B&B’s offering dormitory rooms (though it’s still listed as a B&B and not hostel!), so double check.
On the plus side.. Great way to meet people, and if you want privacy some hostels offer private rooms cheaper than hotels.

On the not so good side.. Usually sharing with lots of people, some dorms running to 12 beds! Choose wisely if you’re easily disturbed in the night.

MY FAVOURITE REYKJAVIK HOSTEL.. 
Kex Hostel in the heart of the city is fantastic. Not the cheapest, but reasonable dormitory rooms in a fabulous setting with mountain views. The restaurant is well respected amongst locals and hosts live music regularly.

Camping – Cost: Free
If you’re a real adventurer, camping in Iceland is brilliant. It is a little chilly and windy, even during summer, so you must be a hardy beast to endure the weather. But the good news is, it’s totally free and legal as long as you use your common sense and do not damage the environment around you. There’s also lots of great camping sites in Iceland, if you want a bit more luxury. And if you don’t fancy lugging your camping gear with you, there are a variety of companies who will hire you equipment on arrival! Sorted.
Check out this fabulous and informative Camping Iceland website to find out more.
On the plus side.. Free! Being at one with nature. Pitching pretty much wherever you like (within reason – see above). Not too many scary creepy crawlies, just flies. Lots of flies.

On the not so good side.. Very windy. Few trees, so you’re undoubtedly camping somewhere very exposed. It might rain too.

AirBnB – Cost: Starting from as little as 30 euro per night and up
As the tourism market continues to explode in Iceland, the AirBnB scene has followed. Whilst there’s still not a great deal of choice compared to many other countries, it’s always worth a look and shouldn’t be skipped over. There are some gems of holidays houses in rural locations that you just simply wouldn’t get to enjoy otherwise, unless you’re camping. It also opens up a whole host of new options in Reykjavik.
On the plus side.. Takes you to places you might not go to otherwise, has some special places to stay in that you might only find on Airbnb, and you meet locals!
On the not so good side.. It’s AirBnB, so usual AirBnb rules apply; you might be sharing someones house, it’s not as necessarily as reliable as a hotel and in rural Iceland, it can be tricky to follow directions to get there. Also, some locals have concerns about how AirBnb has impacted the housing market, especially in Reykjavik.

FOOD

One of the many delicious meals I enjoyed in Iceland

Eating out – Cost: Realistically? At least 10 euros and up
Yes, eating out is expensive. Reykjavik offers some great restaurants which are well worth trying but expect to pay around 15-20 euros for a main and 10-15 euros for a lunch, excluding drinks. The popular cheap eat is the Icelandic Hot Dog, costing less than 3 euros, but little else to choose from for budget travellers.

CUT THE BUDGET

Avoid drinking alcohol. Alcohol is highly taxed in Iceland, so a pint will set you back about 8-10 euros. Keep to the tasty tap water and you’ll see those restaurant bills drop.

 

Eating in – Cost: Free, if you raid the free food shelves!
The good thing about Iceland is that they understand most tourists find the cost inhibitive to eat out for every single meal, so most Guesthouses, B&B’s and hostels offer cooking facilities. Whilst groceries aren’t exactly budget, you can eat reasonably well for 10-15 euros a day. Even less if you have (or make!) friends to share food costs with. The best budget supermarket is Bonus, look out for the big pink pig. And don’t forget to raid those ‘free food’ shelves at guesthouses/hostels.

WHAT DID PHOEBE DO?

During my 2 week trip around Iceland, my friends and I did a mix of eating out and eating in. During the day we’d have a roadside picnic, which worked perfectly as we’d often be driving through a rural area where there was no food options anyway. At nighttime we’d often have a meal in or near our accommodation, allowing us to explore the local culture and cuisine.

BYO (Bring Your Own Food) – Cost: Much cheaper than if you’d bought it in Iceland
I’m sure I wasn’t the first, and won’t be the last, person to have brought their own food on holiday to Iceland. Instant noodles, cereal bars, dried fruit, chocolate and even pasta brought from home make for cost saving lunches, snacks and even inventive noodle dinners!

Have you booked your ticket to Iceland yet?

In case you’ve missed them; check out other posts about Iceland below, like why you should visit Iceland in the first place! Or explore other destinations like eating in Turkey.