Iceland is one of the most popular countries to visit these days, and also one of the most expensive. Thanks to the influx of low-cost airlines flying to the capital city of Reykjavik, tourism is booming. Unfortunately, the savings stop as soon as you step off the plane. Just about everything is expensive.
Does this mean you should avoid Iceland? Absolutely not! It just means that careful planning and packing is necessary to keep costs down. If I had known these 12 tips during my first trip to Iceland, I would have saved a bundle. Without further ado, here are my 12 best tips for saving money in Iceland.
Planning to have a drink with dinner? A glass of beer or house wine will easily set you back around 8$-10$. Alcohol prices in Iceland are outrageous, so do yourself a favor: If you plan to drink, stock up at the duty-free shop at the airport. I know you are anxious to see those waterfalls, but trust me here. Take a few minutes and shop around for everything you want to have during the trip. My friends and I did this, and then shared a few drinks at our hotel before going out, or to end the night.
Icelanders tend not to hit the bars until close to midnight or later for this very reason. They drink at home with friends and let the tourists run up tabs instead. Still want to experience an Icelandic bar? There is a super cool app that shows you all the best happy hours in Reykjavik, with prices. Check it out here: Reykjavik Appy Hour.
In moderation. Although cheaper than eating out, groceries are still expensive in Iceland. If you have room in your suitcase, bring trail mix and dry snacks from home. At the grocery store, pick up things like fruit, bread and sandwich ingredients. Many hotel rooms and hostels have kitchens available, so take advantage of them and do some simple cooking. I picked up plenty of Skyrr (Icelandic style yogurt) and had some every morning for breakfast, along with fresh bread and Icelandic butter.
Iceland’s water is some of the best in the world. Their tap water is perfectly safe and incredibly clean, no filtering needed. One of the easiest ways to save money in Iceland is by bringing a water bottle from home and filling it up from the tap. Are you seeing people buying cases of water at the supermarket? Spoiler alert: those bottles were filled up with tap water too. I would bet you all the Krona in my wallet those are tourists buying that water.
Some grocery stores in Iceland are significantly more expensive than others. For the best deals, do your shopping at Bonus, Kronan or Netto.
Bonus points for using a reusable bottle, and eliminating MORE plastic from the landfills. 🙂 I started using this water bottle a few years ago, and now I never travel without it.
If your hotel or hostel serves breakfast, take advantage of it. Yes, this tip works anywhere but going out to breakfast every day in Iceland is another huge expense. We did it almost every day, and spent around 20$ a plate for a tiny breakfast (mostly toast with jams, cheese and a little slice of meat) and coffee. You can also eat in your room like I mentioned above, but either way, beware of the cafes.
Breakfast is also a much more leisurely activity in Iceland, unlike in the US, and we always waited quite a while for our food. It’s great if you want to linger, but if you’re in a rush to get out sightseeing keep this in mind.
Gather up those groceries and bring them with you to explore the Ring Road. Leaving the city majorly limits food options and you might be stuck eating something expensive that you don’t really want. I could argue with myself on this and say, I came all the way to Iceland I want to eat Icelandic food! To compensate, pick up some unfamiliar food and local specialties at the grocery store so you can still have that foodie experience you imagined.
Iceland is known to have great coffee. There is not a single Starbucks in the whole country. What?! While eating breakfast at the hotel, fill your thermos before a morning of exploring. Many attractions seem to have coffee shops popping up all over, tempting you with their rich aromas. Have that thermos in hand and walk right on by.
The price of gas in Iceland is high, so consider getting the most fuel efficient car available. You probably won’t need a 4 wheel drive vehicle if you are visiting in the summertime, or don’t plan to do much driving. Many rental agencies say it’s essential, but depending on your route it may not be. Just planning a leisurely trip around the ring road? A 2 wheel drive will be just fine. I remember filling the tank on our SUV to the tune of $100 USD right off the bat and doing a double take.
Since we’re talking about driving, one thing I never do when renting a car is to get the extra insurance. In Iceland though, I definitely would recommend it. The strong winds stir up all kinds of rocks and debris destined to scratch cars and break windshields. It’s extremely common. Our rental agent told us that more cars come back with some kind of damage than the ones that don’t. The fact he mentioned this when we RETURNED the car wasn’t helpful. Read more about my Iceland car insurance horror story here.
Looking back, I would have planned our routes totally different. Whether putting together an itinerary for a month excursion or planning a long weekend in Iceland, it’s important to be realistic. My group wanted to see multiple sights along the Ring Road but also wanted to stay in Reykjavik at night. Our plan consisted of driving out to a destination (often a few hours away), then driving back for dinner and nightlife.
With limited time we wanted to be in the city as much as possible at night. We thought it would be nice to see the scenery and make stops along the way, and it was, but driving to and from killed us on gas (and time). It would have been so much better to have stayed at a hotel somewhere along the Ring Road and have made it into a 2-3 day side trip. Ideally, planning a trip around the entire Ring Road would have been a dream come true. Lesson learned. Sorry bank account.
It’s no secret the famous Blue Lagoon is a money magnet. It seemed like the Krona floated out of my wallet and away the moment we pulled into the parking lot. Icelandic magic? Guess so! For real though, the most basic no frills package is listed at EUR 54. So understand that if you go that is the MINIMUM you will be spending. Of course, there are lots of upgrades, and they add up quick. To stick to a budget stay strong. That basic package will get you access into the lagoon, which is really all you need. And don’t even think about eating lunch there. It’s a great time for that picnic basket. If you do decide to go, read these tips first!
There are also places to take pictures of the Blue Lagoon without paying an entrance fee. Many visitors don’t realize there is a second part of the lagoon that is free to see. You won’t be able to get in the water, but you’ll still snap photos of that dazzling vivid blue water. Even better, the water will be empty of photobombing tourists.
Decided to skip it? There are plenty of other beautiful hot springs in Iceland without the crazy price tag. Some great alternatives to check out are:
Although this won’t work at the Blue Lagoon, bring your own towel to avoid having to rent one.
These are a common scene in downtown Reykjavik; kitschy souvenir stores selling tons of imported junk to tourists. I don’t think anything is actually made in Iceland, and it’s all super overpriced. Instead, try the museum shops, The Handknitters Association of Iceland (still pricey but worth the cost), or picking up candy and chocolate at the grocery store.
Although I didn’t make it there myself, many people say the Kolaportið flea market is the best place to go on the weekends. If you absolutely can’t leave Iceland without a stuffed puffin (I may have been tempted) go for it. Otherwise, stay away from the cuteness. It’s a trap.
Do plenty of research before packing. Iceland’s climate can be demanding at times, and the proper gear is necessary for hiking or just keeping warm and dry. Having to pick up a pair of waterproof pants or a warmer coat because you didn’t want to take up the suitcase space is not worth it. I know many budget airlines charge for a carry on or suitcase, but that cost is way less than having to do some emergency shopping in Reykjavik.
If you plan to buy some cute Icelandic knit mittens or hats, the same applies. Don’t rely on them for having what you need to be out in the elements. Yes, they are warm, but not meant to get soaked under a waterfall.
Since car rentals and gas are so expensive, split the costs! Get a few friends together and save a ton by splitting gas prices 4 ways. Keep in mind how many people (and how much luggage) can fit in your car, if you have to end up renting large van for your gang, you may not be saving anymore!
Next time, I will be following every single one of my 12 best tips for saving money in Iceland. I don’t consider myself a budget traveler, but I still hate to waste money. Especially on stuff I shouldn’t have had to buy in the first place. Until then, I will just have to enjoy my stuffed puffin! Kidding 🙂
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I have never been to Iceland, definitely on my bucket list, and I'm SO glad I read this post. Thank you so much, these are truly valuable tips. It will be now one of the trips that I'll be planning with my friends rather than just my husband. ;)
oooh Super useful. Thanks for telling me upfront about the Blue Lagoon. I would have been one of those who would have paid for the views. Good suggestions on the groceries and the no bottled water. Definitely will go a long way to save those kronas for a better Iceland experience.
Great tips especially about buying duty free and the happy hour app. Plus where to see the Blue Lagoon for free. :) We frequent the grocery store often when we travel because it saves so much on food costs. Iceland’s on my bucket list so hoping to visit this year.
Very useful money saving tips for Iceland as traveling to Iceland is super expensive affair. I too love to pack raw materials and necessary food items from grocery store. Also good to know that Iceland's water is best in the world and therefore would go for tap water here. It is always good to carry thermos full of tea which we can prepare in our hotel room when we wake up. Also renting a fuel efficient car is a good idea.
Oh so great tips! I remembered being horrified at the cost of things in Iceland. You are so right on all the tips - we didn't plan it but our hotel came with great breakfast and that saved us some costs and saved our stomachs for proper meals. We were lucky to find an Asian noodle soup restaurant which we went for dinner every night. It served to fill and warm our bellies in ice-cold Iceland in March. Also completely agree with the tap water, so good and free in Iceland. Last But not least I skipped the Blue Lagoon, finding it to be more of a tourist trap and making way to see more of Iceland instead. Thanks for this really great list of hints !
Loved reading these tips! So true about buying alcohol at the airport, it's the same way in Stockholm. I also love that you recommended other hot springs, great read!
These are very smart tips that work great wherever you travel. Alcohol prices do not seem bigger in Iceland than in other parts of Europe. In fact, we pay more here in the US. But I agree with you that bring your own bottle, you'll come ahead. Iceland is very high up on my bucket list.
LOL! "Skip the puffin shops"---usually that would draw me in because I think puffins are just the cutest! However, since a majority of items in stock are not manufactured in the country---I'll pass! Thanks for flagging. :)
You and me both Christine! It's had to pass them up but worth taking the time to find something a little more special.
I was really worried about the cost of visiting Iceland, everyone I spoke to says its crazy expensive. Love your amazing tips on how to save money, really helpful!
It's good to have some tips for saving money in Iceland, because it is a really expensive country. I think it is crazy if anyone buys bottled water in Iceland. The water is so good there, I loved drinking straight out of the glaciers & waterfalls! I'm glad I went to the Blue Lagoon, but it is soooo pricey! I bet other hot springs would be just as good, if not better without so many tourists.
As crazy as it sounds, I saw so many people buying water at the store. I couldn't help but wonder what they were thinking lol.