How to Save Money in Iceland

Although it’s become cheaper for foreign travelers since the banking crisis of 2008, Iceland can still be quite an expensive place to travel. Transportation (buses, car-rental, gasoline), restaurants, accommodation, souvenirs, and tours will put the biggest dent in the traveler’s budget. The only bargains are the local food products at the supermarket and the incredible and unlimited Icelandic landscape. National parks are free.

Here are some ways to cut costs on your next trip to the Land of Fire and Ice:

 

Self-catering aka Picnics

Remember this word: Bonus. Look for the big pig. This is Iceland’s supermarket chain and your key to not breaking your Iceland budget. Dairy products like butter, skyr, cheese, and milk are especially good and reasonably priced as well as locally-caught Icelandic fish. Locals tell me there are over 400 kinds of fish that end up on plates here. At the supermarket, the smokled salmon worked well for a picnic because it’s ready to eat.

Icelandic cuisine is good and if your budget can handle it, you should try to eat out a few times. To save money, get a bowl of soup and fill up on bread and butter. The lobster soup is a local specialty.

save money in iceland

Gullfoss Waterfall along the Golden Circle in Iceland

Accommodation

If you want to save money, bring a tent to Iceland. Campgrounds are still pricey, but you’ll save money over any other accommodation beside Couchsurfing. But be forewarned, you’re probably going to get wet. If you’re not a camper, or at least want to stay dry, just bring a sleeping bag. Many guesthouses and hostels offer a cheaper “sleeping bag” rate and save themselves the trouble and cost of washing sheets.

If you’re a hotel or guesthouse person and will be traveling in the high season, book your room far in advance in order to secure the better value accommodation before everyone else does. Also, great deals can be found by using short-term apartment, house, or room rentals on sites such as Roomorama, Airbnb, or Wimdu.

save money in iceland

You’ll see lots of sheep along the road in Iceland.

Rental Car with SAD Cars

Renting a car for a week in Iceland is going to run you well over $1,000 in high season—but not if you use SAD Cars. You won’t find cheaper in Iceland. How do they do it? By renting old cars. We got a 1998 all-wheel-drive Subaru station wagon which ripped its way down dirt roads and cruised the straightaways of the southern leg of the ring road. Those go for about $800/month in high-season and even lower during the rest of the year. Check them out on the web and reserve in advance.

save money in iceland

Our rental car from SAD Cars in Iceland

Off-season travel

Rates drop by up to 50% outside of the summer months. Here’s the thing that Icelanders are always mentioning—the winter’s not that bad. In fact, our partners, Happy Days in Iceland keep stressing to come back in the off-season. The temperature hovers around freezing and the snow doesn’t really stick around Reykjavik. As an added bonus, you’ll get to see the northern lights (and you’ll be more appreciated by the locals)! Speaking of lights, daylight is minimal in December and January. To ease your lack of daylight woes, just go for a soak in one of the natural hot springs or municipal hot pools.