Iceland on a budget – 8 insider tips on saving serious money

Jul 13, 2018

Photographed in Iceland

Iceland is one of the most expensive countries to visit - luckily we have some tips on how to save some serious money during your trip.

No matter if it comes to food or accommodation - the land of fire and ice is quite the costly affair. We were pretty shocked, over and over again, when we got the bill in a restaurant and handing over our credit cards suddenly felt much harder than usual. Seriously though, €200 for Sushi for three? For that money, we could have eaten the exact same dinner five times at our favorite Sushi place back in our old hometown Hannover. €13 for TEN slices of Gouda cheese? €20 for some fruit (that wasn’t even fresh anymore)? By now, we know how spoiled we were in Germany when it comes to food and truth be told, we miss it, quite often. Bread that you can actually call bread, all those different types of cheese, the huge choice of FRESH fruit and vegetables. Unfortunately, we can’t change anything about the selection and prices here in Iceland but in those three years of living in Iceland we learned a few hacks on how to save money and we thought it was about time to share those with you. So how do you get back from your vacation in Iceland having spent as little money as possible? Here are our personal tips for traveling Iceland on a budget:

Happy Shopping

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1. Grocery Shopping

Like in most other countries, Iceland has a few choices when it comes to grocery shopping. Some shops are more expensive than others and prices might also differ in shops of the same chain depending on their location. You will electronic price tags in most stores - it means that the prices might change depending on the time of day and how crowded it gets. (Shady, we know). We, therefore, suggest to avoid shops in or close to downtown and to not shop during busy hours. THE most expensive store you can go to is called '10/11' and you will find it mainly downtown. You could easily call it a tourist trap, and we wouldn’t recommend going there - not only is it overpriced but they also have a small selection. Hagkaup is one of the big supermarkets with a large and good quality assortment but it is also quite expensive. We only shop there if we need/want something special we can only get there - like our favorite Pesto or fresh Sushi. The cheaper options are Nettó, Krónan, and Bónus. They have a fine range, as well - only fruit and vegetables tend to be of a little lower quality than at Hagkaup (plus, they don’t have fresh bread or some super high-quality products you might be looking for, like truffle butter for example). If you want to go as cheap as it gets, then look out for “Euro Shopper”. It’s a brand with reasonable prices and of good quality and being sold in almost every big store in Iceland – unfortunately, they only have the basics, though. (Like pasta, sauce, jam)

If you want to read more on how to best eat and shop in Iceland - especially as a vegetarian/vegan - then make sure to check out our extensive food guide.

2. Transportation

Renting a car (in advance)

If you want to rent a car for your stay in Iceland we always suggest pre-booking and to do so two to four months in advance – especially when you plan on traveling Iceland during high season. The cheaper cars (particularly 4x4) are renting out pretty quickly, so we do recommend some pre-planning. Rather opt for Icelandic rentals (Geysir Cars or Route 1, even cheaper would be Budget Cars and if you go for a 4x4 then Cheap Jeep is a good option) since they tend to be less cost-intensive than the ‘usual suspects’ at the counters at the airport. If you definitely want to go see the highlands then make sure you rent an all-wheel drive or, even better, a jeep. In summer, you will most likely pay twice for what you would pay in winter. On websites like “Guide to Iceland”, you can compare costs, directly book your car and get some advice which insurances you should definitely book according to your travel dates. By the way: there also are rentals that offer used cars (for example sadcars.com or faircar.is) We haven't tried it, yet, but we only heard good things about them and with such rental, you can save up to 50% compared to the regular ones.

Public transportation

Taking a cab is kind of affordable but still more expensive than what we were used to. Taking the Strætó bus is way more convincing, even though it might take a while to understand the timetables and stops. The website Strætó.is has some very handy features like a map where you can check the exact position of the bus you are waiting for or getting your personal timetable. You can also buy your tickets right on your phone with their Strætó app. A one-way ticket costs 400ISK. Beware: when you buy your ticket on the bus you have to pay cash. If you get your ticket printed (ask the bus driver to please do so when you pay) you can use it for 75 minutes on whatever bus towards whatever direction, as long as it’s the capital area. The buses drive until midnight so if you are out longer than that you either have to take a taxi or wait for the first bus in the early morning. If you only stay for a couple of days but want to use the bus regularly you can get a multi-ride ticket (9 rides) for about €24 / $28. Should your stay be longer, you might want to get a ticket for a whole month which costs about €75 / $88.

If you are looking for further information on how to rent a car in Iceland...

...then you might wanna check out our extensive 'Renting a Car in Iceland Guide', which covers everything from insurances needed to cost in general (car, gas, insurances etc.) and which also includes some more overall tips, as well. (Like the weather, winter specifics and more).

3. Drinkable tap water

Don’t buy bottled water in Iceland, like, ever! The cold water from the tap is of extremely high quality and it tastes awesome – so much better than the water back in Hannover, for example (or the foreign one you would buy in the stores, for that matter). The warm water on the other hand… doesn’t taste very good. As long as you don’t have some serious sulfur cravings, don’t drink it. Just let cold water run for a few seconds to have it extra cold and you will feel like drinking out of the most crystal clear mountain spring you can possibly imagine. Therefore, you would never see an Icelander buy bottled water - they always wonder why tourists do so. All you need is a personal bottle you can refill and you are more than fine. You can also drink all the cold water you find in the pristine nature of Iceland (like when you are on a hike just fill up your bottle in the rivers you will most likely come across).

You can also ask for free (tap) water almost everywhere and will find it in carafes in all restaurants and cafés all over the country free for you to drink. Seriously - you don’t ever have to pay for fresh water in Iceland!

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4. Eating out

Dining in Iceland (especially the capital area) is ridiculously expensive. (It is most of the times equally good, though.) So if you want to try one of all those highly rated restaurants during your trip but you are not willing to pay a fortune for it then simply go for lunch instead of dinner. Most restaurants offer a selected lunch menu that is way more affordable (sometimes even half the price) than the dinner menu. If you are not that much into fancy food, anyways then there are cheaper fast food chains like Domino’s, for example. They always have some offers you might want to check out. In general, don’t be scared to eat fast food in Iceland, it is mostly of good quality. (Especially if we are talking about an Icelandic chain like Pizza (pizza), Safran (Indian), Serrano (Mexican)). Of course, it’s always cheapest to prepare your meals yourself. Btw: if you get a simple cup of coffee and are shocked how much you are paying - almost everywhere said price includes a refill (or endless ones). Also, like we just told you, water is free. Going for lunch, taking advantage of the free water and asking for a refill for your coffee you will most likely get a beautiful meal for way less money than expected!

If you are looking for further information on how to eat out in Iceland...

...then you might wanna check out our extensive 'Iceland Food Guide', which covers the best breakfast, lunch, cake 'n dinner spots for vegetarians & vegans (and everyone else) and also names a lot of cheaper options, as well.

5. Going out for drinks (and alcohol, in general)

Alcohol is as expensive as it gets and can only be topped by the prices in Norway (if even). A single beer starts around €7 and from there it just gets worse, the price of a bottle of wine in a fancy restaurant easily makes you wanna cry. You still will be able to enjoy a nice glass of red with your meal, a fancy cocktail in one of the quirky bars downtown or a cold beer on the campsite if you follow two simple rules. Rule number one: Stock up on alcohol as soon as you land! The prices at the duty-free store at the airport are way cheaper than in the specialty stores in Iceland (you can only buy alcohol at the so-called Vínbúðin and don’t be fooled if you see beer in supermarkets - it’s non-alcoholic!) so make sure to stock up before leaving the airport! You can buy six units (which is six 75cl bottles of wine or a few six-packs of beer or two 75cl bottles of spirit) when traveling into Iceland and it is allowed to drink outside. Rule number two: Make use of all the Happy Hours! A lot of bars and restaurants in downtown Reykjavik have special offers at special times so if you feel like having a nice drink, simply check the mobile app ‘Appy Hour’ where you get an overview of where and when to have a drink at a reasonable(-ish) price. We highly recommend the said app since going out for drinks in Iceland is otherwise one of the most exorbitantly expensive things you can do. (But hey, at least going to a club doesn’t cost you an entrance fee so bar- and club- hopping still can be loads of fun.)

6. Accommodation

There are various options of what you can book and where you can stay when traveling to Iceland: hostels, hotels, cabins, AirBnB, camping, camper vans and Couchsurfing. There literally is no such thing as a cheap hotel or hostel – compared to every other place in the world it's cost-intensive, all of it. The cheapest accommodation is camping (right after Couchsurfing, of course). Not too long ago it was absolutely no problem to camp wherever you felt like but with the massive increase in tourists (and loads of them behaving inappropriately, unfortunately) you will now have to camp on public campgrounds. Our hack number one to save some money while doing so: get the camping card! 41 campgrounds in Iceland are participating by now and you get an additional card on top which lets you save some money when taking gas at one of the Orkan gas stations (the pink ones).

You still will have to pay a special tax at every campsite in Iceland (which is around 80 cents) but they will charge per camping card and not per person (a card is valid for two adults and up to four kids /one tent / a camper or a caravan). The card can be used during the summer season which is from May 15th to September 15th. You are paying €149 ($180) for the season so it seriously doesn't get any cheaper than this when traveling Iceland. Usually, a single night on a campground costs between 10 – 15/€20 per person so as soon as you stay longer than five days (to a week) a camping card is your door to Narnia! If you go to tjalda.is you will find all the information you might seek and a map that includes all campgrounds. Simply click on the icons and get insight into each and every campsite.

If you are looking for further information on camping in Iceland...

...then you might wanna check out our extensive and utmost comprehensive 'Camping Guide To Iceland'.

Find everything from rules and regulations to useful overall tips on everything 'wild camping and the right to roam' right over here:

If camping is not your jam and you prefer solid four walls, then we recommend opting for Airbnb! We are huge fans of the platform since (in our experience) it's where you find the cheapest, most unique and perfectly located stays in Iceland, especially if you are looking for a summerhouse, a cabin with hot pot, getting to know the locals, the lifestyle etc. If you are going to rather remote places like the western fjords then make sure to check AirBnB before looking for other options since you might easily find a real hidden gem there. We once booked an entire house with a porch overlooking the ocean, a barbecue, a parking space and three bedrooms for less than every hotel room available in the entire west-fjords. If you want to book via AirBnB but you're not having an account, yet then make sure to sign in via our link. That way you get 21€ signed onto your account which you can use straight for your first booking. We've put together a list with favorite accommodations all around the country which you can find right here:

7. Shopping clothes

Do you want to bring something Icelandic (to wear) back home? Maybe one of those nice wool sweaters or some other cute memorabilia? We would highly recommend avoiding the souvenir shops on the main road downtown, they sell their stuff for way too much money. All those stuffed puffins are as much Icelandic as traveling the country is cheap and mostly manufactured in China. If you shop there you will spend a good amount of your budget on literal trash so we advise you to rather check out some of the awesome second-hand stores for cool clothes (like the Red Cross shop, Spúútnik or Gyllti Kötturinn, all downtown) which is where we bought most of our clothes in Iceland, the ‘Good Shepard’ for furniture and antiques and the weekend Kolaportið flea market (at the Reykjavik harbour) for other fun stuff and little items. Another tip is to check out the smaller shops in the side streets. There you will find more unique clothes - some even have a tag saying who exactly knitted them (they still are expensive but at least it’s no trash and some real memorabilia to take back home with you.)

8. Keeping track of money

Get a currency converter app!!! The Icelandic Krona is kind of confusing and not a hundred percent convertible into € (or other currencies, for that matter). To not lose track of what you are spending always use a converter app to see what exact amount you have just been spending, especially when you buy something a bit more expensive. Also, check your countries conversion rate to decide whether you bring cash or use your credit card during your stay. And if you use your card and the device asks if you want to pay in your currency or Krona then rather select Krona since that is usually a bit cheaper for you.

 

Last but not least and so obvious,

that it doesn’t get an extra category:

travel off-season!

And now, happy saving!

If you are looking for further information on traveling Iceland...

...then you might wanna check out our extensive and utmost comprehensive 'Iceland Travel Guide' with more tips about shopping, eating out, transportation, camping, accommodation and all the other stuff you need to know when planning a stay in Iceland. You find the guide right over here:

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