How To Visit Iceland On a Budget and Save Lots of Money – Episode 35

While Iceland can be a pricey travel destination, after three epic trips to the “Land of Fire and Ice,” I’ve found plenty of creative ways to stretch my Iceland travel budget. If you’re interested in planning a trip to Iceland on a budget, there are plenty of ways to save money. In this podcast episode, I share money-saving Iceland tips, including making the most out of happy hour specials in Reykjavík and how visiting off-season can save you money.

Listen to the episode here:

Listen on Apple Podcasts | Google Podcasts | Spotify

Also, check out my Iceland travel guide Iceland: Nature, Nurture, and Adventure (available on Amazon) for even more Iceland travel planning tips. From what to pack to things to do in Iceland, this travel guide shares how to plan an affordable, adventurous, and culturally enriching trip to Iceland. Written with Black women in mind, it also encourages Black women and other People of Color to visit Iceland and experience Iceland’s natural wonders, unique food, and rich culture.

Money-Saving Tips To Experience Iceland On A Budget

1. Free stopover 

Did you know that you can fly to Iceland for free?

If you book any transatlantic flight with Icelandair, you can “stopover” in Iceland at no additional cost for up to seven days. This is a great way to save on airfare and check out multiple destinations. 

2. Rent a car

When visiting Iceland, plan to venture outside of Reykjavík to explore the country’s natural beauty – waterfalls, caves, glaciers, volcanoes, and more.

Since there is no public transportation outside of Reykjavík, consider renting a car. If you are traveling with a friend or in a group, splitting the cost of a rental is a great way to save money in Iceland.

I recommend planning a day trip to the South Coast of Iceland to visit the black sand beaches of Vík and snorkel at Þingvellir National Park.

3. Go cashless

Like most countries, Iceland is a card-friendly place. While there’s nothing wrong with paying with cash, most people in Iceland pay with either a debit card or credit card.

Save money by avoiding fees at currency exchange kiosks and ATMs.

Use your credit card for all purchases and rack up those points and miles. Later redeem them for free flights, seat upgrades, hotel stays, and other travel perks. Just make sure that you’re using a credit card with no foreign transaction fees.

Lastly, pay off your credit card balance with your travel fund when you get home.

Read Next: How to Budget for Your Trip

4. Shop Duty-Free Iceland

Alcohol is expensive in Iceland. Since Iceland taxes alcohol based on the alcohol content, the stronger the spirit, the more it will cost. One way to save money on alcohol in Iceland is to buy drinks during happy hour, but I will share more later.

Another way to save money on alcohol in Iceland is to swing by Duty-Free Iceland before leaving the airport.

Duty-Free Iceland offers discounted prices on domestic and international spirits. This shop is only located at Keflavík International Airport.

One more thing, Duty-Free Iceland limits visitors to six units of alcohol. To figure out the specifics check out this helpful alcohol allowance calculator.   

5. Find Appy Hour

To help you find the best drink deals in Reykjavík, download Appy Hour, a mobile app that lists all the happy hour specials happening throughout Reykjavík. Locations are listed based on proximity and price.

6. Bring water bottles

Another way to save money in Iceland is to bring your bottle and fill it up with tap water. For one thing, it’s free. Secondly, water in Iceland is drinkable, and it is never chemically treated and naturally purified through molten rocks. You might be surprised to find out that bottled water in Iceland is a waste of money because it’s the same water from the tap.

Best water bottles for travelers:

• LifeStraw Go Water Filter Bottle
• CamelBak Chute Mag Water Bottle

7. Shop at supermarkets

Save money on food in Iceland by shopping for groceries at local grocery stores like Bónus and Krónan. Both stores carry a variety of snacks, drinks, and many other items you might need during your stay. Avoid grocery stores like 10/11 and Kvosin Supermarket, which are notoriously more expensive. 

8. Skip the tip

When you eat out in Iceland, skip the tip. Unlike most countries where tipping is the majority of the staff’s earnings, tipping isn’t customary here because the “service charge” found on the bill covers tipping.

9. Get taxes back

Lastly, after a wonderful trip, Iceland allows visitors to get a portion of their taxes back. If you go shopping in Iceland, claim your tax-free refund at the airport before you head out. Since this process is involved, use this Iceland tax-refund guide.

Is Iceland expensive to visit? Want to plan the perfect trip to Iceland?

Check out my Iceland travel guide for travelers interested in planning an affordable and culturally enriching trip. Get practical advice on the best things to do, tips for renting a car, the best foods to try, and more!

Get the Iceland travel guide on Amazon.

Listen to the episode here:

Next read how Natasha visited Iceland on the cheap and saved thousands of dollars!

Free Things To Do In Reykjavik

Despite Iceland’s high costs, there are lots of free things to do in Reykjavík and cheap things to do in Reykjavík too.

Go on a walking tour

The free walking tour with CityWalk Reykjavik was one of the first things I did when I arrived in Reykjavík. This two-hour historic tour offers a great introduction to the capital city and Icelandic culture. The insightful guides are Icelandic history graduates and high school teachers. The tour was fun and engaging.

During the tour, visit the most historic parts of downtown Reykjavík including Arnarhóll and Fógetagarður Square.

At the end of the tour, set your own price. Tip what you feel the tour was worth – these guys deserve it. You can even tip in any currency you like which is super convenient!

Bonus Tip: CityWalk Reykjavik sends you a comprehensive city guide after your tour. Many of the suggestions include free things to do in Reykjavik on a budget.

Visit historical monuments

Unless you’re touring Reykjavík with a knowledgeable local or historian, it’s easy to miss the less popular historical sights but Reykjavík is studded with all types of monuments that commemorate founders, leaders and important events in Iceland.

Here are a few of my favorites:

• Arnarholl Hill & Statue of Ingolfur Arnarson commemorates the first permanent Scandinavian settlers in Iceland.
• Statue of Leif Eriksson in front of the Hallgrimskirkja Church honors Leif Eriksson, the first European to explore the North Americas.
• Vikurgardur or Fógetagarður Square is now a public space but it was formerly the home of the old Reykjavík Church and the site of Reykjavík’s oldest cemetery.

For the complete list, check out the historic spots in Reykjavik that you probably don’t know about.

Spot street art and wall murals

You can find street art all over Reykjavík, just look on the sides of the buildings. Each mural tells a story and makes a bold statement.

Take a scenic walk around the lake

There are plenty of swans and ducks to admire at Tjörnin so bring your camera. When you’re done, head over to the Reykjavík City Hall. On the main floor, there is an impressive 3D topographic map of Iceland.

Sunset at Solfar Sun Voyager

As you enjoy the cool breeze, marvel at the rainbows and a gorgeous view of snowy Mount Esja and snap photos with this iconic Icelandic landmark.

Cheap Things To Do in Reykjavik

1. Swim at local swimming pools

Highly recommended by Eric (Eiríkur) from CityWalk Reykjavik, I skipped the Blue Lagoon and instead chose a more local bathing experience at Vesturbaejarlaug swimming pool. For more options, check out some of the other affordable swimming pools and hot springs in Iceland.

Less than a half an hour walk from the city center, at Vesturbaejarlaug, I enjoyed hot tubs and steam baths alongside locals for 900 ISK ($8 USD).

Before entering the pool I had to shower naked (in front of the other female patrons) but it was totally fine. No need to be shy. I did not feel uncomfortable in any way.

In fact, bathing at Vesturbaejarlaug was one of the most relaxing experiences I had in Iceland. Nevertheless, I have to warn you, be ready to run for your life when getting out of the water!

Along the waterfront, visit the Sun Voyager which pays homage to the first Icelanders. Although it looks like a Viking ship, it’s actually a dreamboat following the setting sun.

For more ideas on ways you can explore Iceland on the cheap, read how Natasha spent seven days in Iceland and spent only $100.

2. Try all types of Skyr flavors

Not to be mistaken for yogurt, Skyr (pronounced skeer) is a dairy product made in Iceland. I loved the light and smooth texture. To save money, I suggest heading to the local grocery store instead of ordering Skyr at a restaurant.

Try unique flavors for 200 ISK ($2 USD).

Wondering how much other snacks and food costs in Iceland, here’s a full breakdown.

3. Climb to the top of Hallgrimskirkja Church

You can see the Hallgrimskirkja Church from just about anywhere in Reykjavík.

Admission to the church is free but for 900 ISK ($8 USD), climb to the top of the tower and see 360-degree views of Reykjavík, the harbor, and Mount Esja.

4. Discounted drinks at Happy Hour

The Loft Hostel is a great place to meet locals, enjoy live music or take in awesome views of the neighborhood from the patio. They also have Icelandic and Scandinavian beers on tap. If you are into ciders, try the Somersby Cider.

Happy hour starts at 4 p.m. and ends at 8 p.m daily.

Although alcohol is expensive in Iceland, taking advantage of happy hour specials is a great way to experience Reykjavík on a budget.

Helpful Tip: Speaking of happy hour, download the Reykjavik Appy Hour app and discover all of the happy hour specials happening throughout Reykjavík in real-time. The app displays the establishment’s description, the happy hour duration and prices for drinks.

Looking for more ways to save money in Iceland? Listen to this episode for ideas on how you can do Iceland on a budget.

What are YOUR favorite free things to do in Reykjavík?