10 Tips For Saving Money In Iceland

For most people, when they hear the word Iceland, they immediately imagine scenic landscapes, endless amounts of waterfalls, the midnight sun, northern lights, and beautiful Icelandic women.


While all of those are there, many people forget the most important caveat you should know before packing your bags and heading to Iceland—it’s expensive. Very expensive.  For those of us who may live in New York, San Francisco, or Sydney, Iceland won’t be a big shock to your wallet.

But for the rest us, Iceland (and all of Scandinavia for that matter) will empty your wallet blazing-fast and without bias. Although I do sympathize with those around the world whose currencies are far weaker than the dollar, pound, or euro and still manage to make it all the way to the Land of Fire and Ice. I’m from a small town in North Carolina, where a pint of delicious craft beer will only cost you 4-5 dollars. That same craft beer will cost you 8-10 dollars in Iceland. The cheapest mixed drink at my favorite burger place (and party place by night), Prikid, is roughly 11 dollars. Again, this comes to no surprise to those who live in big cities, but a few reckless nights of partying and eating out in Reykjavik can leave you broke before you even venture out of the capital.

At one of my favorite restaurants in Reykjavik, Seabarron, two skewers of seafood you select and a bowl of the world-famous lobster soup will run roughly around 3000-3500 Krona, depending on what you select. That’s almost a thirty-dollar meal for one person.

So, besides the people who go to Iceland for only a week and bring a lot of money to blow, what is the die-hard budget traveler to do when they want to make the trip?

Here are my top 10 money-saving tips for Iceland.

1. Shop at BONUS

“Bonus” by Daniel Lobo

BONUS supermarkets are the only way to go when it comes to buying food to cook at your hostel, Airbnb, or a host’s place. Their prices are cheap, and if you ask any locals, or people who have been to Iceland, they will give you the exact same advice. There are two locations in downtown Reykjavik that can be reached easily on foot if you’re staying in that area. If you’re staying in Iceland for longer than a weekend, you’ll need to grocery shop, because eating out for breakfast, lunch, and dinner will quickly total close to 100 dollars a day if you aren’t mindful.

2. Hitchhike


Hitchhiking by Moyan Brenn

If you’re from the States like me, you’re probably ready to close this article from what I just suggested. Just hear me out. I know, from the time we were children we were told to never get in a car with a stranger, and all growing up we heard countless warnings from parents, friends, and Hollywood about the dangers of hitchhiking as a means to get from point A to B. But Iceland is different. According to the Global Peace Index, Iceland is the safest country on earth. If you still need more convincing that it’s safe to hitchhike there, mlb.is found that Iceland has the 3rd Lowest Murder Rate in the World, only coming behind Singapore and Lichtenstein. There were multiple years in the last decade where Iceland didn’t have any murders at all! So do not fear the unknown while in Iceland. Icelanders are extremely helpful and friendly, and many other travelers just like you have empty seats in their cars and would love to help you get to the next leg of your journey. Be polite, they are trying to save money too. Offer to pitch in for a tank of gas. It’s the right thing to do, and trust me, you’re saving yourself literally hundreds of dollars by not renting a car. Stick that thumb in the air and don’t look back.

3. Carpool

If you’re traveling alone, but don’t feel comfortable hitchhiking—carpool. This method allows you to have an equal amount of adventure in Iceland with not as much uncertainty, because some people have to travel with time constraints. My first morning in Iceland I was jet-lagged and alone, and I was having doubts about whether or not these travel blogs online that claimed Iceland was so easy to make friends in and find people to share cars with were telling the truth, but I didn’t lose hope. Two Swiss women stood up in front of the whole breakfast area at Loft asking if there was anyone who had a rental car. I didn’t have one, but I seized the moment, and offered to pitch in gas money if they got the rental. Before I knew it, I had met two other friends willing to do the same, and within two hours I was crammed into a tiny Hyundai i-fit with four other total strangers having the time of my life. Don’t be afraid to approach strangers. You could be missing out on adventure and lifelong friendships.

4. Eat the Hot Dogs

In all honesty, a hot dog is probably the cheapest thing you can buy in Iceland. No, I’m not joking. Besides the free, delicious tap water, this is your best bet. A plain hot dog with just ketchup and mustard is only 300 Krona, which equates to around $2.50 USD. If you want to add some toppings, prices can range between 400-800 Krona, but it’s still a killer deal. There are hot dog stands everywhere in downtown, and I promise you, they will tempt you as you stumble out of a bar at three in the morning hungry for some drunk munchies. You can’t go wrong with the 300 Krona hot dog. A not-so-nutritious snack that doesn’t put a dent in your wallet.

5. Hit the Happy Hours

All nations united — our crew just thirty minutes before ringing in 2016.

All nations united — our crew just thirty minutes before ringing in 2016.

If you plan on drinking every night in Reykjavik, prepare to wake up in the morning hungover, check your bank account balance, and see you’ve spent over 100 dollars. Trust me, I’m speaking from experience here. If you’re not careful, this could drain your funds dry after a few back-to-back nights of partying, and that’s never good for the budget traveler. So what is the person to do on an tight budget who still wants to enjoy some drinks as the day winds down? Happy hours. Basically every bar in Reykjavik offers some version of this, and some surprisingly, don’t end early. I recall one bar that their happy hour ended at eleven at night during the summer. The most efficient way to find the best happy hour deals in Reykjavik is through an app for your iPhone called Appy Hour. They also have the same app for Android users. It is essential if you want to hit all the happy hours and save money. My favorite hostel that I always stay at, Loft, has one of the best happy hours in all of Reykjavik. It’s only 600 Krona for either Gull, Thule, or Viking. So much so, that many of the locals are seen wandering in during these hours. It’s a cozy environment, and the rooftop balcony is a nice touch too.

6. Couchsurf

There is no better way to travel on a budget and simultaneously get to know local culture than Couchsurfing. It’s a wonderful community, a very active one in Iceland might I add, and it doesn’t cost you a dime. Although, it is more than just a free place to crash. You need to really value the cultural exchange aspect of Couchsurfing, and also being generous towards your hosts helps too. Make sure you read Couchsurfing Do’s and Don’ts if you are a newbie surfer, and read it in its entirety. It’s a crucial article if you want to have the best experience Couchsurfing. I’ve had many friends Couchsurf in Iceland and they had great experiences. I also Couchsurfed through 8 countries on my Eurotrip with 12 different hosts and those memories are some of my most cherished.

7. Do the Walking Tours

In a country full of high prices, there are a handful of things in the capital that don’t cost a dime. CityWalk Reykjavik is the absolute must on that list. Their walking tour of the city is informative and fun for even the non-history-buff (like me). They do an excellent job, and if you like their services, they offer pub crawls at a nice price of 2500 Krona, and during the winter they have a free walking tour of the financial collapse, where you get to see where the 2008 financial collapse began.

8. Buy Your Alcohol at the Liquor Store

Why? Because if you’re a craft beer drinker like me, buying a six pack of my favorite Einstok’s Icelandic Pale Ale, is much cheaper than paying 1000 Krona per bottle at the hostel. Plus, the upside to doing this, is in the winter, if you’re heading to a bonfire, going to shoot off some fireworks, or just on the search for the fleeting northern lights, just take your alcohol with you. Open container is permitted in Iceland. My beer stayed cold all night, and yes, I toted my six pack around with me the entire night of New Years Eve. Your hostel will have no problem with you drinking your own alcohol in the communal areas, but bars will not permit you to do so, but that comes as no surprise.

9. Don’t Go Shopping

This word of advice is one of the most essential. Any of the souvenir stores or clothes outlets are going to cost you an arm and a leg anywhere around downtown Reykjavik. This is purposeful, and Reykjavik’s main street, Bankastræti, is lined with them. Although if you want to get a fridge magnet or a coffee mug, do what you got to do, but if you start shopping for yourself and the whole family, you’ll be broke in no time. Always keep a keen eye checking the prices for similar items in smaller towns. You may discover the same item that was double the price in Reykjavik is half the price at the same outlet in Akureyri, the capital of the north. My coffee mug on my first trip to Iceland cost nearly 20 USD at the popular Puffin Shops! Take this advice and skip the shopping, especially if you are on a longer backpacking trip like I was.

10. Skip the Blue Lagoon

Myvatn Nature Baths

Myvatn Nature Baths by Peter De Ruiter

*Gasp!* I can hear you through the computer screen right now, completely appalled that I would suggest for someone to skip out on the most iconic tourist attraction that Iceland has to offer. Well, if you’re on a tight budget, don’t go. It’s pretty pricey, and there is always next time. Anyway, by now you should have hitchhiked or carpooled all the way to North Iceland, and if that’s the case, then check out Myvatn Nature Baths, about an hour east of Akureyri on the ring road. Their tickets cost about half the price of the Blue Lagoon for the same mineral-rich water. There’s none of the nice silica masks you can slather on from the edges of the rocks, but, when I was there this past January in the dead of winter, I got an entry, a towel, and two beers of my choice for 4,400 Krona. It’s over 6,800 Krona just for entry to the Blue Lagoon and have the silica mask, but no towel! No drinks! Myvatn Nature Baths is the way to go if you’re looking to soak in some geothermal heated water and relax for half the price.

So, there you have it! With these tips you should be well on your way to saving money on your next trip to Iceland.