Iceland is incredibly expensive. There’s no way around it. It’s an expensive destination. Pretty much everything costs money. And while Iceland is one of the most stunningly beautiful places I’ve ever been to, it’s also very expensive. This is where some of the best budget travel tips (like finding cheap/free accommodation, cooking your own food, etc.) will save you the most! You can read all about how much money I spent in Iceland in this post! I saw a lot of Iceland in just three days, and tried my best to pinch pennies where I could. So if you’re traveling to Iceland on a budget, here are 14 ways to save money:

1) Skip the Blue Lagoon unless you’ve got a lot of time. One of the top attractions in all of Iceland is the Blue Lagoon, a thermal pool/spa. It is seriously expensive—the basic rate starts at €71 per person. Unless you have a lot of time (3+ hours), I’d skip it. You don’t want to spend all that money and then spend two hours thinking about how much money you just spent. I chose to skip it as I would have had just about 2 hours maximum (I’ll go back one day when I have more time—and money!). So give the Blue Lagoon a pass unless you can really justify the time you’ll spend there. (Also, you can still see the water outside like the above photo for free!)

2) Reykjavik has loads of happy hours—you can drink on happy hour somewhere all night until 1:00am. I was surprised and thrilled to find out that bars across Reykjavik have great happy hour deals! Most happy hours in the US and the UK tend to be between 3-6pm. Happy hours in Reykjavik are spread out throughout the night—you can find a happy hour pretty much anytime from 12pm to 1:00am! Do some research before and plan out your route—you can even download the app that will tell you all the best deals!

3) Don’t go alone—find someone to split costs with! While I love traveling solo, I have to say—I wouldn’t go to Iceland by myself. Hostel dorm rooms in Reykjavik started at £30 per person and went up to £50. Whereas you could stay in a decent hotel and split the costs of the room between two. Renting a car and paying for gas is also much more affordable when you have someone to split the costs with. Mr. Away With Maja is hooked on a new business plan that would match solo travelers in Iceland based on their sightseeing and music preferences! It can be expensive to travel by yourself, especially when renting a car—so try to avoid going to Iceland solo.

4) Save up credit card points to lower accommodation costs. This was probably my proudest moment: after saving up for months, I had accumulated enough points with my Chase Sapphire Preferred credit card to get two out of our three nights in Iceland basically free! If you can be strategic with your points hacking, you can save a lot of money where it matters the most. And while we’re on it, a hotel with free parking in Reykjavik will be an absolute steal if you can get one! (Sign up for a Chase Sapphire Preferred here!)

5) Consider alternate accommodation. If you’re really trying to cut costs, ditch the hotels. Opt for hostels, camping, couchsurfing, renting a camper van, etc. Get creative and plan a lot in advance! Accommodation can be one of the highest costs in Iceland so do whatever you can to lower those costs. I always recommend using Hostelworld to book hostels!

6) Hot dogs and fast food are easy and cheap. While it might not be glamorous, Iceland has a lot of fast food and street food that is much more affordable than eating out in restaurants. Hot dogs are sold everywhere and are really cheap. You can also find fast food chains (like Aktu Taktu) to eat on a budget. It’ll be a fraction of what you’d pay for a standard meal.

7) There’s free parking at Seljandfoss if you can walk for 5 minutes. One of the most popular waterfalls and natural attractions is Seljandfoss. Unfortunately, Seljandfoss charges 750 ISK (~£5 or $6.25) for 24 hours of parking—the charges need to be paid regardless of what time you go. However, you can park at the small lot right by the entrance to the highway and walk for 5 minutes to the main parking lot. And that parking lot is absolutely free! Look for the puffin statue and you’ll know you have the right one.

8) Be extra strategic with toilets. A lot of places charge for toilets, so think in advance about when you might need to go. Costs for the toilet can range between 100 and 200 ISK. So if you’ve visited a museum, restaurant, attraction, or anywhere that might have a toilet, make sure you use it before you go. You can save a small fortune. Thingvellir National Park’s visitor center has free toilets if you’re wondering!

9) DON’T SPEED. Speeding fines are really high in Iceland. And while you can always get caught by a police officer in a vehicle, there are speed cameras on the main roads in Iceland. These cameras can take a picture of your license plate number, and bill your car rental provider for the fine. Play it safe and don’t speed.

10) Check to see if you can claim your tax back on certain purchases. At some tourist shops, if you spend over a certain amount of money you can get tax-free shopping. Keep your receipts, and you can claim this money back at the airport before you leave! While this probably isn’t worth it if you’re buying small things, if you’re buying an expensive souvenir (like a Nordic sweater, for example), you could be able to claim a decent amount of money. If you have questions, ask at the register when you’re making your purchase!

11) Be on top of your game when renting a car. Make sure you get good rental insurance when you rent a car, and get gravel insurance just in case you sustain any damages due to gravel. It is better to pay a bit more for extra, comprehensive insurance, than to walk away with a bill in the hundreds—or thousands. And remember: TAKE ALL THE PICTURES when you get your car! Even the tiniest scratch could end up costing you something, so it’s better to be safe than sorry and take pictures of anything that looks damaged—before you drive away.

12) Drive really carefully, and be especially cautious opening your car doors. Again, you don’t want to get loaded with extra costs for damage when you return your car. So drive really carefully, take it slow in bad weather, leave plenty of space from the car in front of you, and in general be a cautious driver. Be extra careful when you open your car doors. A lot of rental car damage in Iceland is due to doors swinging open in crazy winds, so think in advance!

13) Tipping isn’t really a thing in restaurants. While tips are always appreciated, they aren’t necessary in most places in Iceland. Generally, it’s included in the prices. This can be especially hard for Americans, who are drilled to TIP for everything! But you don’t necessarily need to tip as wages are high—so you can save a little bit if you do go out!

14) Bring your own food from home. Cost of living is really expensive in Iceland. This means that even basic things like food will cost more in Iceland than (probably) where you’re from at home. Pack a few of your favorite snacks, a packed lunch, a bag of pasta for when you’ve got your own kitchen, anything—it can make a big difference in the long run. A friend of mine spent £20 to check a bag of food for her flight that lasted her for a week in Iceland. She easily saved that money by avoiding the high prices in Icelandic supermarkets. The little things can really add up to help you save!

While Iceland isn’t a cheap destination, thrifty travelers can still cut costs and make it doable on a budget. But my main rule of being a budget traveler is to always spend the money on the things that are YOUR priority! If there’s something that you really want to do, do it. It’ll always cost more money to go back to a place again, rather than to just do the thing you want to do while you’re there in the first place. Don’t skimp on your dreams! It is possible to do Iceland on a budget and lower expenses with some tips and tricks.

Have you been to Iceland? What money-saving tips do you have?!

Check out my other posts on Iceland!

20 Photos To Convince You Iceland Is The Most Magical Place On Earth

How Much Does It Cost To Travel Iceland For 3 Days?

The Best Of Iceland: A 3-Day Itinerary

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