How To Visit Iceland on a Budget – What I Spent

I’m setting out to prove that it’s possible to travel to expensive destinations affordably – this time, it’s how to travel Iceland on a budget.

When I told people I was going to Iceland in January, the most common reaction was pretty much OMG THAT’S AMAZING. The second most common comment?

‘Isn’t Iceland super expensive though?!’

They were kinda right, to be honest. Iceland isn’t a cheap destination to visit. But with some tips, tricks and early booking, I managed to spend four nights in Reykjavik, including four tours and three local attractions, for under £400 all-in. Which is pretty impressive, I think. Wanna know how you can travel Iceland on a budget too? Read on for a run-down of exactly what I spent, where I spent it, and how I saved money.

Flights and Accommodation – £148.08

Flights – £55.98, EasyJet

It started with a flight…. back in July, I found a decent deal on flights to Iceland so I just went ahead and booked it. Pretty easy. I did actually end up paying an extra £70 for a new outbound flight because I’m an idiot who went to the WRONG BLOODY AIRPORT, but I’m not counting that because I know, dear reader, you’re a sensible person who double checks where they’re going first.

Reykjavik Hostel Village – £67 (for 4 nights)

I reserved a bed at Reykjavik Hostel Village in plenty of advance on Booking.com using my Genius discount I’d gained from booking five other stays in the past. With plenty of hotels in Reykjavik coming in at higher prices PER NIGHT, I feel like under £17 per night was an absolute steal. 

2025 Update: Reykjavik Hostel Village is now sadly permanently closed – however, there are other hostel options in the city for a budget Iceland trip:

Other hostels in Reykjavik

Although it was the cheapest I could find at the time, there are plenty of other affordable places to stay if you’re happy with a bunk bed in a dorm (prices listed below are for the cheapest dorm bed I could find – for smaller dorms or female only, expect to pay slightly more). These are some other hostels in Reykjavik that are worth looking at for budget Iceland accommodation…

• KEX Hostel – popular with travel bloggers, this hostel has a rustic aesthetic. From £28 per night.
• Loft HI Hostel – in the city centre, with a rooftop terrace. From £29 per night.
• B47 – cheap, clean and central. From £17 per night.
• Bus Hostel – simple dorm rooms next to the bus station – helpful if you have an early/late flight. From £18 per night.
• Galaxy Pod Hostel – a futuristic themed hostel with sleeping pods. From £38 per night.

Private rooms in Reykjavik hostels

Yep. Hotels in Reykjavik are pretty pricey. If you’re the kinda budget traveller that needs your space, it’s worth looking into private rooms in hostels, or guesthouses rather than ‘name’ hotels.

Return Airport Transfers – £25.10 

Using my Expedia.com membership (as in, it’s free, all you need to do is sign up), I managed to get the cost down from £30.24 to £28.42. Before booking, I checked out TopCashback, which gave me £3.41 for booking via Expedia. Therefore, my transfers actually cost me £25.10 altogether. 

Iceland Day Tours – £129.24

Golden Circle Full Day Tour – £33.11

Okay, so. A lot of people I spoke to, and plenty of blog posts I read, all recommended hiring a car. But as I was travelling solo, I wasn’t too keen on this – instead, I decided to get my butt comfy on a coach to see the sights. Tours were the one thing I was planning on splashing out on. Because when you go to Iceland, getting out there and seeing the beautiful scenery is basically the reason you’re there, right?

The tour price on Expedia for a Gray Line Golden Circle Classic Tour was £42, with Expedia Member discount this went down to £37.62, and with £4.51 cashback, it cost me a total of £33.11.

Find out more about the Golden Circle Full Day Tour.

Guided Full Day Tour of the South Coast £56.39

On the Friday, I headed down to the South Coast with Reykjavik Excursions, for a full day tour. The original price was £72, with Expedia Member discount this went down to £64.07, and with £7.68 cashback, it cost me a total of £56.39.

Visit Reynisfjara Black Sand Beach on a South Coast Iceland tour.

Northern Lights Tour – £32.74

I actually booked this in loads of advance, before I’d started scouting around for deals. Grayline had a 5% off code for the Northern Lights Mystery Tour, which I used. FYI – I didn’t actually see the Northern Lights, sadly, as you’re not guaranteed a sighting. But with Grayline, you can rebook on another date. An excuse to go back, yeah?

Reykjavik ‘Free’ City Tour – £7 

Whenever I visit a city, the ‘free’ tip-based walking tours are usually an early port of call. For two hours with a funny and knowledgable local guide from Citywalk Reykjavik, I tipped 1000ISK – around £7. 

Other Attractions – £24.60

Icelandic Phallological Museum – £10.60

Considering general museum prices in European cities, I don’t think £10.60 is too bad. Especially to have a giggle at the world’s largest collection of willies.

Icelandic Punk Museum – £7

When I walked past the Icelandic Punk Museum and it caught my eye, I just had to go inside. A museum about punk, in a former public toilet of all places? Count me in.

Vist the Icelandic Punk Museum

Hallgrímskirkja Church – £7

Hallgrímskirkja, one of Iceland’s tallest structures, is totally free to enter. However, if you plan on getting the elevator to the top – which I TOTALLY recommend – it’ll cost you 900ISK – about £7. But for the epic views, it’s TOTALLY worth it.

Find out the best things to do in Reykjavik – on a budget!

Food & Drink – £55.85

Eating and drinking on a budget in Iceland

The key to travelling Iceland on a budget comes down to your food and drink choices. Because eating and drinking out is probably the most expensive aspect of the city. You’re looking at around £30-50per person for a decent sit down meal, at least. And that’s without booze.

Breakfast & Dinner

Staying in a hostel with a kitchen meant that I could cook pretty much all my own meals, so I picked up some pasta, sauce, pesto, Skyr (Icelandic yoghurt) and granola. Nothing fancy, but it meant all my breakfasts and dinners were sorted for £23 – less than half the price of one dinner out. I grabbed mine from the nearest supermarket, a 10/11, but if you head to a Bonus discount store, you’ll likely be able to get supplies even cheaper.

Lunches

For lunches, on my first day I picked up a £1 sandwich from Boots at the airport on the way out; treated myself to an affordable lunch deal at Sea Baron restaurant on my second day; bought a sandwich from the supermarket for the third day; and tried out Reykjavik’s famous hot dog stand on the Saturday. Combined with a few snacks picked up in my supermarket shop and a box of cereal bars from good ol’ Poundland, I managed to eat on the go pretty cheaply too.

On the non-alcoholic drinking side, Iceland’s tap water is excellent quality, and restaurants and cafes will fill you up for free. So make sure you take a water bottle!

What I spend on food & drink in Iceland

Supermarket Shop: £23
Two courses at Sea Baron: £18
Hotdog: £3.20
Sandwich: £5.65
Pint in Irish bar at happy hour: £6

Souvenirs – £9.12

One fridge magnet: £7
Postcard for Mum and Dad, posted: £2.12 

How much did it cost me to travel Iceland on a budget?

Flights & Transfers £81.08
Accommodation £67
Tours £129.24
Other Attractions £24.60
Food & Drink £55.85
Souvenirs £9.12

Total Spent – £366.89

Verdict: Can you travel Iceland on a budget?

Yes! There were other expenses that I needed to splash out on before I left, such as thermals (because January in Iceland BE COLD, y’know – check out my guide to packing for winter in Iceland with just hand luggage), but overall, I think I did pretty well visiting Iceland on a budget. As I said earlier – Iceland is still pretty pricey, especially compared to ridiculously cheap European destinations like Bucharest.

For some, the amount I spent on five days away might still cause some raised eyebrows, but compared to what other visitors have reported, I think I did pretty damn good. And honestly, there are a few things (like my supermarket shop) I could have done even cheaper.

Hopefully this post shows that Iceland IS doable on a more modest budget than you might expect, even if you’re travelling solo. You may not get to live the luxurious life on a budget trip to Iceland – but trust me, seeing those cascading waterfalls, breathtaking vistas and magical aurora more than makes up for a little compromise.

More Iceland Travel Guides:

• The Perfect 24 Hour Reykjavik Itinerary
• 8 Awesome Things to Do In Reykjavik
• Why Iceland is Perfect For Your First Solo Trip
• The Icelandic Punk Museum, Reykjavik
• Iceland In Winter Packing List: Travelling With Hand Luggage
• What To Expect On A Golden Circle Tour In Iceland
• Reynisfjara Black Sand Beach, Iceland