How I Traveled Iceland On A Budget of $50 A Day

Wondering if it’s possible to travel Iceland on a budget? Find out how I traveled Iceland’s Ring Road on less than $50 USD per day!

First off, I wrote this post way back in 2015, and back then, we drove the Ring Road in the middle of winter, sticking to a backpacker’s budget of $50 USD per day for all expenses.

Since then, due to a tourism boom, prices for fuel, car rentals, accommodation, and food have skyrocketed. That said, it is still possible to travel to Iceland on a budget following my tips below– just perhaps not as cheaply as I did on my first trip.

My Tips For Travelling Iceland on a Budget

Below I'll provide my first-hand account of how to travel around Iceland cheaply without compromising on experience and adventure. You might spend a bit more than $50 per day, but you don't need to spend hundreds!

1. Rent a Car - The Easiest Way to Cut Travel Costs in Iceland

The easiest and best way to get around Iceland is to rent a car. Having your own means of transport will allow you to see more, as well as being able to move and explore at your own pace.

However, this is also one of the BEST ways to cut costs, especially if you're willing to go all out on a budget in the name of adventure.

In my opinion, the best route to explore Iceland holistically is on the Ring Road. This is Iceland's main Highway and loops around the entire island. Don't worry, there are thousands of detours, hikes, and dirt roads to veer off from once you are driving.

The cheapest way to see the Ring Road is by renting your own car. We rented our car for $90 per day (split between two people). However, these days you're looking at over $120-$150 minimum.

On my trip, we slept in our car in the middle of winter. No, you don't have to go that extreme, but having your own transport means you don't have to pay for tours or transport from your hotel in Reykjavik.

2. Or... Book Shared Bus Tours from Reykjavik

I recommend renting your own car as it works out cheaper than taking a tour. That said, there are some good deals to be had, especially recently as competition has increased.

If you'd prefer not to rent a car, then there are plenty of short bus trips in Iceland that you can book that are relatively affordable from Reykjavik. Many of these cost around 70 to 80 euros per day, which is not too expensive.

3. Sleep in the Car

It Sounds cold? Yep, -18°C cold. But if you're a backpacker scrounging the last few hundred bucks left over from your Europe trip, then this is one way to really see Iceland on the cheap. This is how I traveled to Iceland on my first visit back in 2015, spending less than $50 per day.

It isn't glamorous, but there are countless perks of sleeping in a car in Iceland including:

1. No wasted money on accommodation
2. Sleep wherever you want
3. Explore on your own time
4. No packing and unpacking
5. It's an adventure!

We had absolutely no issues parking our car either in small towns or in one of the many roadside truck rest stops. As an alternative, if you have the equipment or if you are planning an Iceland trip in Summer, you could always bring a tent and sleeping bag.

Remember to pack warm clothes and a thick sleeping bag. 

Although you will lack a warm shower, Iceland has no shortage of either commercial or small, local hot springs, saunas, and pools. These are very cheap and should also very much be a part of any Icelandic itinerary.

Seeing the Northern lights from a warm hot spring on the edge of a fjord is also one of the most romantic moments of my life. Unfortunately, the moment was shared with my hairy, bearded friend - and neither of us had showered for days.

Although it was an epic moment, his presence didn't do much to complement the ambiance. 

4. Budget your food

This is a backpacking no-brainer. It's on every single "How to Travel X on a Budget" guide. Eating out really is the number one killer of cash on the road. You will have to prepare your taste buds for the humdrum of quick-to-cool oats and peanut butter if you want to travel to Iceland on a budget.  

1. Hostel freebies for cooking gear

If you stay in a hostel for your first night in Reykjavik, check out the freebies section. Many people drive the ring road and then fly out, often leaving their gas cookers, pots, pans, etc behind. Take advantage of this and grab some free cooking gear.

Be sure to repay the favor on your way out.

2. Stock up on food in Reykjavik

There is no shortage of local supermarkets in Reykjavik. Make sure to stock up on essentials like oats, pasta, fresh produce, and road snacks here. This will be the cheapest and most plentiful source of food during your trip. Iceland is still quite remote, only about 380,000 people live here and 125,000 of those are in Reykjavik!

3. Stick to the Basics

If you're reading this blog then you're more than likely looking for Icelanding adventure over luxury hotels in Reykjavik. To save money, stick to basic high-carb foods that are going to give you plenty of energy for your big hikes. Pastas, oats, muesli bars, and noodles are some of the cheapest foods but are some of the best for a road trip.

Besides, a hot $5 pasta and pasta sauce combo is probably going to taste just as good as an authentic Italian restaurant meal after a cold hike up a volcano!

5. Enjoy Iceland's Nature

It really is simple. The best things in Iceland really are free. Chase the waterfalls, turn off for spontaneous day hikes, check out the glaciers, and drive out to the fjords at night to catch the Northern Lights.

These are the reasons you came to Iceland, and they shouldn't compromise your trip to Iceland on a budget.

Of course, there are some things that you might not want to miss that might lighten your pockets. Snowmobiling, glacier hiking, ice-caving, and helicopter flights.

Yes, these things are epic and definitely shouldn't be avoided. My general rule of thumb is to consider whether this is something I definitely can't do anywhere else in the world. If it is, I'd definitely go for it if you have a few dollars to burn. It really depends on your budget and expectations of Iceland.

6. Book Your Accommodation Well in Advance

Booking your accommodation in advance is always a smart move, especially when traveling to popular places like Iceland.

By booking in advance, you can secure your preferred location and avoid last-minute price hikes. I always compare hotels and budget hostels on Booking.com since they offer the largest selection of accommodations in Iceland. If you book often, a great way to save money is to take advantage of their great discounts on their Genius loyalty program.

7. Hitch-hike

Although hitching in Iceland is not so common during the winter months for obvious reasons, it has become a popular place to hitch during the warmer months. Of course, if you are heading in summer as a solo traveler, it might be a great idea to hitchhike rather than rent your own car.

The best places to hitch a ride would definitely be at Reykjavik hostels, where many like-minded travelers begin their Ring Road journey, or just outside of town on Route 1.

If you're driving, picking up hitchhikers often pays off. There are hundreds of people looking to travel to Iceland on a budget. This means that it's a great way to meet other travelers who may want to join in for the whole trip.

Although it's an unwritten law not to ask for money from hitchhikers, they may ask to join in on your whole Ring Road trip. This might be a good opportunity to share petrol and food costs if you have the space.

8. Visit in The Off Season (Winter)

While winters can be chilly in Iceland, visiting in the off-season is one of the best ways to save money on everything from accommodation to car rentals. However, there are many more reasons why visiting Iceland in winter can be a good idea:

1. Northern Lights: One of the biggest draws to Iceland in winter is the chance to see the incredible Northern Lights. The Aurora Borealis is a natural phenomenon that creates a dazzling display of colorful lights in the night sky. Iceland's long winter nights provide the perfect backdrop for viewing this stunning spectacle.
2. Winter activities: Iceland offers snowmobiling, ice caving, glacier hiking, or even the option take a dip in a natural hot spring in the snow.
3. Fewer tourists: Iceland is a popular tourist destination, but during the winter months, there are fewer visitors. This means that you can enjoy all that Iceland has to offer without the crowds.
4. Unique landscapes: Iceland's winter landscape is truly unique. The snow-covered mountains, frozen waterfalls, and icy fjords create a stunning winter wonderland that is unlike anywhere else in the world.

Photos From My Budget Trip Around Iceland

Iceland is a landscape photographer's dream location. Towering mountains, daunting volcanoes, floating icebergs, and the famous Aurora Borealis. Hopefully, some of my shots will inspire you to visit this epic country.

Update: Iceland is the place where I first fell in love with travel photography. Nearly a decade later, I'm still on the road full-time! These are some of my first photos.

I hope this short guide to traveling Iceland on a budget has been useful for your Icelandic travel planning! Before you head off, check out some of my other guides below for more inspiration and ideas.

• Coolest Places to Stay in Iceland - my favorite unique cabins, lodges, and hotels in Iceland
• How to Travel Iceland on a Budget - learn how I traveled the Ring Road for less than $50 per day
• 4 Epic Glacier Boat Tours - these are the best zodiac tours and glacier lagoon trips
• 10 Top Iceland Bus Tours - the best day trips from Reykjavik and multi-day journeys across Iceland
• Golden Circle Tours - find the best Golden Circle Trips from Reykjavik
• Where to Stay in Reykjavik - the best hotels and accommodation picks for Iceland's capital