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Iceland is a beautiful country full of natural wonders. From natural hot lakes (that stink like eggs), to volcanoes, waterfalls and black volcanic beaches, it offers an unforgettable landscape for your travels.

You know what else? It’s bloody expensive.

A normal filter coffee will set you back around £8, or a small bowl of soup in a restaurant will cost about £16. Even the supermarkets will be about 4 times more expensive than you are used to, and staying in a youth hostel dormitory will cost the same as a simple but private hotel room back home.

I recently spent a week in Iceland in which my sister and I drove 1500 km around the whole country and packed our days full of cool activities and amazing nature. Being one student, and one fresh graduate living in London we had to get inventive in order to cut down costs.

Here are our top tips for surviving in Iceland on a budget:

Accommodation

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Camping – the cheapest way to stay in Iceland is to camp. Some campsites even have tents that they put up for you along with all the equipment you will need. If bringing your own luggage, bear in mind you will need to book on extra luggage. For my trip, we had one suitcase full of kit (sleeping bags, mats, the stove, a tent) and another suitcase for both of our clothes. A lot of campsites will have cooking facilities, free showers and communal areas, but not all of them. You should look up the sites on trip advisor to make sure you know what to expect.

Camping is only really feasible in summer months, because during winter Icelandic temperatures drop so low. During June, the temperatures were at about 11 degrees during the day and 4 degrees at night – so a 3-season sleeping bag is essential for a good night’s sleep.

I highly recommend the Reykjavik campsite. Powerful hot showers, a huge communal kitchen and friendly staff make it well worth the slightly higher price than more rural sites and can be used as a base to travel around the country.

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Food

It is expensive to eat out in Iceland, but even the supermarkets might give you a bit of a shock. You’re looking at £6 for a sandwich. My sister and I went to a cheap supermarket in England before we left and packed out bags with noodles, boil in the bag rice and some cheap tins of food. Bring fod that will travel well and is easy to cook and you will appreciate it later!

The cheapest supermarket in Iceland is called Bonus and has a pig on the logo, so that’s the place to go to top up supplies.

If you are eating in Reykjavik you should go to the thai restaurant called Krua Thai. Absolutely delicious, and reasonably priced at about 15 pounds each. The server was so friendly and helpful and as we don’t eat meat they replaced the meat with tofu, and charged us less! The Massaman curry was to die for, and the huge portion of Pad Thai had us waddling back to the tent.

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Transport

Bus tours tend to be expensive, although if you are short for time they can be a good way to see the highlights of the country, especially the golden circle.

However, if you want to see a lot of the country why not rent a car? We rented from Sixt which we picked up at the airport. It has terrible online reviews but we actually found the service great. For 160 quid, we rented a Chevrolet Spark for a week and had no problems with scratches. However, they did have limited mileage of 1400 km so we ended up having to pay for the extra miles.

We paid top insurance at 188 euros (150 quid) which meant that we only had to leave a deposit of around 100 pounds and didn’t have to worry about something going wrong. Do not scrimp on insurance because if you get a small scratch it can cost you hundreds of pounds. Altogether it cost us about 300 quid for 8 days transport in which we travelled the whole country, for me it was totally worth it and made it easier to travel between campsites and check out free and cheap activities.

If you are driving, you must have headlights on 24/7 and remember they drive on the right side of the road!

Hitchhiking is a cheap/free alternative but you should always be with at least one other person and need to bear in mind it will take a lot longer to get around so you should only do this if you have loose plans/a lot of time to spare.

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Activities

The famous natural hot lakes of Iceland are unmissable, but I would recommend avoiding the blue lagoon as it is expensive and crowded. Myvatin nature baths are around half the price and do student deals for around £20. Once you get used to the eggy smell you can happily relax and swim in hot water surrounded by mountains.

WARNING: do NOT enter hot lakes when you are out in the countryside. The reason you pay to enter lakes is because they have to be constantly cooled. Tourists jumping into unknown hot lakes have been known to die from their burns.

Hiking and exploring doesn’t need to cost a bunch. People pay hundreds to get guided tours of nature but there are loads of things you can check out for free. All of these suggestions can be found on the number 1 ring road which can be driven in a week

  • Grabrok Volcanic Crater can be climbed in under an hour and has stunning views
  • Black beaches at Vik are striking and home to lots of puffins
  • Jokusarlon lagoon is a lake with floating icebergs, amazing photo op
  • Godafoss waterfall (when the Viking leader decided to finally accept the new Christian god he took his little sculptures of the Viking gods and threw them into this breath-taking waterfall)
  • More examples of things to do on the ring road can be found on this fab article

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We also really loved the folk museum between Borgarnes y Akureyri which was about 8 pounds to enter (and looked like a falling down village hall from the outside). We were the only people in that day so the man who worked at reception walked round with us and was so knowledgeable, telling us interesting anecdotes about the shark catching equipment and other artifacts which blew us away (and made us very glad we don’t like in ancient Iceland – bloody hard life)

Hope you found this helpful! Don’t hesitate with any questions

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