Surviving Iceland on a Shoe-String Budget

You’ve seen the instagram photos, the magazine covers, the raving reviews. Iceland is in vogue now, but who can actually afford it? This is no backpackers’ paradise. Welcome to the land of $36 cheeseburgers and $150 hostels. You’ve been warned. Still want to visit? I am here to tell you it is possible to travel Iceland on a shoestring, but you’ll need to be creative. Actually, no, you won’t because I’ve already done that part for you. Read on to get a sense of what you’re up against and how to avoid the worst of it.


Getting to Iceland is cheap and easy now thanks to Wow Air, but getting around Iceland is another story. Public transit in Iceland is expensive and impractical given how dispersed the country is. The most feasible options are to either rent a car or hitchhike.

Most visitors opt for the first option, which is, of course, the easiest. You can rent a car in Iceland for under $40 a day and gasoline is around $8 per gallon. If you split the car among two to five people, this option becomes more affordable. I’ve had friends even make a profit off of their car rental by offering rides via Blablacar. .

Otherwise, Iceland is quite good for hitchhiking. The main routes along the Golden Circle and southern coast see a lot of traffic during the peak season in July and August. Wait times tend to be a bit longer in the more desolate interior, but rapid weather changes are the biggest threat to hitchhikers in Iceland. Note that snow and freezing rain are not uncommon even in summer time, so be prepared! You can find more detailed advice for hitchhiking Iceland on hitchwiki.




dorm bed at a hostel in Iceland will cost around $40–80, but there are no hostels to be found in large stretches of the country. In places where they do exist, they tend to fill up fast, so if you venture far from Reykjavik, you may be turned away from the only hostel within a hundred-mile radius. If you’re not able to find a hostel, beware that hotel and guesthouse rooms in Iceland are usually $180-$280 even in the most remote locations, though prices tend to be a bit cheaper if you book through AirBnb instead of inquiring in person. In Southern Iceland, you can sometimes haggle the price for a room at a family-run guesthouse down to as low as $100, but don’t count on this.

Many budget travelers choose to sleep in their cars. If you choose this option, you can take showers and use the restroom using the free amenities offered at any of the outdoor camping facilities found throughout Iceland.

Personally, I recommend camping. If you don’t have equipment, you can rent a tent (around $10 per day) and other camping gear from several camping stores in Reykjavik.




Your options are dismal. Food in Iceland is expensive. Be prepared to drop $25-$50 per meal if you eat at a restaurant. As an alternative, you can eat overpriced and unappetizing fast food at a gas station. Think $13 hamburgers and $5 hotdogs. Personally, I subsisted off of Skyrr, a kind of Icelandic yogurt that is high in protein, low in fat, and available at any grocery store or gas station for under $2. If you don’t want to eat junk food, this may be your only affordable option.

If you can find a proper grocery store, you can save a substantial amount by cooking your own meals. However, even at a grocery store, meat and produce can be quite pricey, so many backpackers choose to cook pasta each night for the duration of their stay in Iceland. Of course, to cook your own meals, you will need access to a grocery store and a kitchen— neither of which can be taken for granted in Iceland. Be sure to check whether you will have access to a kitchen at whichever accommodations you book. Realize that outside Reykjavik, settlements large enough to support a grocery store are few and far in between, so cooking your own food may not always be possible.

Is Iceland worth it?

Yes, but only if you do it right. Some sites will suggest you stay a week or two to drive around the whole country. Do not do this. Northern Iceland is like Southern Iceland, except less beautiful, less interesting, and more expensive. Iceland loses its magic quickly when you are spending so much to see so little. I recommend sticking to Southern Iceland and the Golden Circle.

The Golden Circle and the Southern Coast each could fill one long day, but you’d be wise to plan around the assumption that the weather will only be suitable half of the time. Stay two to four days. Sleep at a hostel in Reykjavik, and take day trips out to the scenic areas. The sun shines late into the night during summer, so it is possible to pack a lot into one long day if you run low on time.

This beautiful country doesn’t come cheap, but as long as you come with a game plan, it doesn’t have to cost you an arm and a leg.

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