25 tips for visiting Iceland on a budget

25 tips for visiting Iceland on a budget

Visiting Iceland should be on every traveller’s bucket list. It has a unique landscape, beautiful nature, stunning glaciers, geysers, waterfalls and lakes. But it’s also one of the most expensive countries in the world.

Reaching Iceland isn’t expensive. I booked my direct return flight from Manchester to Keflavík International Airport for £52 with EasyJet. Keflavík International Airport (KEF) is Iceland’s main airport and near to Reykjavik. I booked these flights 6 months in advance and I went in November as I wanted to visit when Iceland is covered in snow and to see the Northern Lights.


Flying into Iceland
Flying into Iceland


You can visit Iceland on a budget and have an amazing time.


Here are 25 tips to help you:


1) You don’t need to use cash


You could go your whole trip in Iceland without using cash. Even the Free Walking tour allows you to tip using your credit card.  If your bank charges foreign cash withdrawal fees then you might be better off using your card to pay for everything. Lots of shops and bars didn’t take American Express but Visa was fine.


ATMs at KEF airport
ATMs at KEF airport


2) There are two different buses to Reykjavik centre


Make sure you get the right bus from the airport as they go to different bus terminals which are miles apart.

The Airport Express ends up at the Gray Line bus station. The Flybus goes to the BSI Bus Terminal (for 2,700 ISK around £19 one way) and then you can transfer to a shuttle bus if you’re staying at a major hotel for an extra 600 ISK. I recommend looking up where your hotel/hostel/guesthouse is before getting on a bus.

Keflavík International Airport is a 40 minute drive from Reykjavik. If you don’t hire a car or take one of the buses, the only other option is to take a taxi that costs 15,000 ISK, which is £105!


3) Wear leg warmers


Leg warmers don’t just do their job, they also look cool. If you’re going to Iceland in winter then make sure you GEAR UP. The last thing you what to do is buy more clothing when you get there.

Wear leggings under your jeans, double up on socks, throw on arm warmers and gloves, always put on a thermal vest and wear a hat with your hood up. If you look on Amazon or eBay you can buy leg and arm warmers for as little as £0.90. 


If you go to Iceland in the winter then Gear UP
If you go to Iceland in the winter then GEAR UP


4) Take snow and ice grips for your shoes


If you go in the winter it’ll be very icy underfoot. Even in Reykjavik, on the pavement there’s ice and if you head out of the city to see the nature sites you’ll definitely need snow and ice grips. You can buy them off Amazon for £2.75 or from B&M if you live in the UK.


Shoe and ice grips
Shoe and ice grips


5) Consider staying in a guesthouse


Hostels are expensive in Reykjavik (£40 a night for a 12 bed dorm). If you’re on your own, they’re still the most economical option. But if there’s more than one of you then a private double room in a hostel is £160.

There are Guesthouses in Reykjavik which are a lot cheaper than the big-name hostels. My sister and I stayed at Igdlo Guesthouse for £70 a night for a twin room and shared bathroom. We had a communal kitchen and dining room. Having cooking facilities and preparing food yourself saves lots of money when travelling.


Straight in and we made it a mess - Igdlo Guesthouse
Straight in and we made it a mess – Igdlo Guesthouse


You cannot sleep at the airport – they have signs warning people. So don’t consider this an option. 


KEF airport - No bikes, No smoking, No dogs, No sleeping
KEF airport – No bikes, No smoking, No dogs, No sleeping


6) Don’t tell the locals if you’re staying at an Airbnb


There’s a lot of hate for Airbnb from the Icelandic locals. We went to a bar and got into a heated conversation about it. The locals claim it’s pushing up rent in Reykjavik and they can no longer afford to live in the city where they work.


7) Shop at Bonus supermarket


Eating out is expensive in Iceland, even getting a kebab. So consider buying food to cook yourself and taking pack lunches on day trips.

The locals shops at Bonus and avoid the smaller food stores in Reykjavik which are targeted at tourists.

The downside is Bonus closes quite early – 6:30pm on weekdays and 6pm on Sundays.


8) Alcohol is only available from Vinbudin


Bonus and food stores DO NOT sell alcohol. All the beer in these shops is alcohol free and from the packaging you might not realise. To buy alcohol you have to visit a Vinbudin, a government run store which isn’t open on Sundays and closes at 6pm on Saturdays and weekdays. So make sure you stock up for a weekend.


7,390 (£52!) for a litre of vodka in a Vinbudin
7,390 ISK  (£52!) for a litre of vodka in a Vinbudin


9) Book Reykjavik’s Downtown Free Walking Tour a few days in advance


There are so many tourists in Reykjavik. I heard more American accents than Icelandic. This is partly due to the influx of airlines offering free stopovers in Reykjavik on flights from America to Europe.

This means the free walking tour gets packed out. You need to book it a few days in advance to get a space. They have a check list and are strict about kicking people off the tour if they’re not on the list.

I wasn’t that impressed with the tour as there were a lot of people and the guide was very political. As Reykjavik is so small you can explore most of it by yourself. But, hey, it’s tip based so you might as well take it if you have time.


Pride flag on the floor - near Austurvöllur (Parliament Building)
Pride flag on the floor – near Austurvöllur (Parliament Building)


10) Visit Hallgrímskirkja and pay to go up to the top


This church is an icon of Reykjavik and it’s free to enter, which is great in the colder months.




To take the lift up the tower it’s 900 ISK (£6.50) and it’s totally worth the money. At the top you have stunning 360 degree views of Reykjavik.


View of Reykjavik from Hallgrímskirkja
View of Reykjavik from Hallgrímskirkja


In the winter the tower closes at 4:30pm so watch out if you’re running late.


11) Walk through Grjótaþorpið neighbourhood


Grjótaþorpið neighbourhood (The “Village of Grjoti”) is the oldest neighbourhood in Reykjavik and some of the house are over 100 years old. It’s a nice area to stroll through with lots of colourful and interesting buildings.


Houses in Grjótaþorpið neighbourhood
Houses in Grjótaþorpið neighbourhood


12) Check out the Flea Market Kolaportið


Kolaportið is a great place to pick up souvenirs away from the hundreds of identical tourist shops in Reykjavik’s high streets. It’s only open on the weekends and is free to enter.


Kolaportið Flea Market
Kolaportið Flea Market
Checking out the clothing
Checking out the clothing
Books in Icelandic
Books in Icelandic


This is also the perfect place to try fermented shark.


Fermented fish
Fermented fish


13) Watch out for the Icelandic jumpers


I really wanted to buy one of these and there were plenty at Kolaportið and other knitwear stores. I asked how much one was and I thought the lady replied “5000 ISK”, around £35, which I thought was reasonable for an unbranded jumper in a flea market. But no, she actually said 15,000 ISK (£105). These Icelandic jumpers are over £100 so maybe more for the rich tourists.


The Oh So Expensive Icelandic jumpers
The Oh-So-Expensive Icelandic jumpers


14) Feed the ducks at Lake Tjornin


This lake is right in the centre of Reykjavik.

There are plenty of ducks and swans to feed. And who doesn’t love feeding ducks on a beautiful lake?


Hey duckies
Hey duckies
Lake Tjornin
Lake Tjornin


15) Harpa building is a free place to go for warmth


This is a concert and conference hall. It’s also a great place to go when a blizzard strikes in the winter.  It’s warm, free to enter and has seating. Plus no one bothers you.


Harpa building
Harpa building
Inside in the warm Harpa building
Inside – in the warm



16) Download the Happy Hour App – “Reykjavík Appy Hour”


This app is a life saver. Drinking is so expensive in Iceland but don’t worry! Lots of bars have happy hour and one night we even started drinking at 3pm and chased happy hours until 10pm. Some of the happy hours are only on the Icelandic beer Viking. We preferred the cocktail happy hours which were harder to find.


1,600 ISK cocktails at Hotel Holt, felt like the bar in the movie Passengers
1,600 ISK happy hour cocktails at Hotel Holt. It felt like the bar in the movie Passengers


There’s even a Labowski Bar if you fancy a white Russian or check out the beer of the day for 600 ISK from 5pm to 8pm at Micro Bar. If you don’t mind paying full price for a cocktail then try the gin based cocktail at Bar Ananas. It’s the best cocktail in Reykjavik.


Beer of the day for 600 ISK from 5pm to 8pm at Micro Bar
Beer of the day for 600 ISK from 5pm to 8pm at Micro Bar


If you’re stuck for things to do, check out this website for things happening that day. It includes free exhibitions, concerts and happy hours. We found it really helpful.



17) Try a shot of Brennivín


Brennivín is Iceland’s signature distilled beverage and a must-try if you’re out drinking in the cold.




18) Head to the swimming pools in town


If you can’t afford the Blue Lagoon (more on that later) or you just want a more authentic experience, then head to one of Reykjavik’s thermal pools and spas.

The most popular is Laugardalslaug, with a large thermal outdoor pool, open until 10pm. It only costs 650 ISK compared to the Blue Lagoon’s 6,100 ISK (soon to be 6,990 ISK from March 2018). You can get the blood pumping by going from the warm pool, to the freezing outside and then jumping into a sauna.


19) Hire a car


We opted to do tours instead of hiring a car as it was November and we aren’t used to driving on ice and snow – we’re British.

Every tour we took in Iceland wasn’t good and I wouldn’t recommend. Being a seasoned traveller I can tell what’s a good tour and what’s not.

Unfortunately, the tour companies know they have a captive audience with millions of tourists visiting each year. They don’t make an effort and most tours are just driving you to a site and dropping you off. There is no flexibility and you can’t stop to admire the stunning surroundings or stroke the Icelandic horses.

If you hire a car you can see whatever you like, whenever you like. You also have the option to drive the ring road and not just stick to the Golden Circle near Reykjavik.


Faxi Waterfall on the Golden Circle
Faxi Waterfall on the Golden Circle
Gullfoss Waterfall on the Golden Circle tour
Gullfoss Waterfall on the Golden Circle tour


20) Book the Blue Lagoon at least 2 days in advance


You MUST book the Blue Lagoon. It’s so busy and gets booked up days in advance. You want to make sure you have a good time slot – not 8am in the morning when it’s still pitch black.


Blue Lagoon Iceland
My sister in the Blue Lagoon Iceland


Another reason to hire a car is to reach the Blue Lagoon which is located a 50 minute drive from Reykjavik. The return bus from Reykjavik to the Blue Lagoon costs £40 with Reykjavik Excursions (yes, it’s a rip off). As the Blue Lagoon is located near the airport, many people opt to do the Lagoon straight away when they arrive or before their flight back. Due to the time of our flights this wasn’t an option for us.


21) Don’t pay for the Premium package at the Blue Lagoon because people steal your robes


The Blue Lagoon is worth the money. Yes it’s a tourist trap but it was one of the most amazing experiences I’ve had while travelling and I’ve been to almost 50 countries.

We booked the standard package for 6,100 ISK (these prices are going up in March 2018). There are also other options, for example, the Premium package for 10,200 ISK. This is the most popular package and includes a free drink and bath robe. However, when you go into the Lagoon you have to leave your towels and robes hanging up inside. All the robes look the same and people were picking up any robe, even I could have taken one. We heard so many people come out of the Lagoon and say “where’s my robe!?”.


My best Blue Lagoon pose
My best Blue Lagoon pose


The Blue Lagoon also really messes with your hair as it’s so drying. It took 4 days for my hair to return to usual. Next time I go I’ll tie my hair up in a bun.


22) Don’t buy anyone else a drink at the Blue Lagoon


When entering the Blue Lagoon you’re given a wristband, you use this to pay for things inside the Lagoon, like drinks. However, you’re limited to 3 alcoholic drinks per person, so if you buy your friend a drink using your wristband, it’ll come up as two drinks and you’ll miss out on your last drink. 

The only alcoholic drinks they had were – beer, cider and sparking wine. No spirits or cocktails.


23) Wait out the weather as it’s constantly changing


While at Þingvellir National Park we arrived to heavy snow and couldn’t see anything. We freaked out as we were on a tour and they offered no flexibility to stay longer.




After walking around in the thick snowfall, not seeing 5ft in front of us, the sky cleared and the sun came out, lighting up the whole park. Iceland has very variable weather so if it’s snowing or raining, relax as it’ll pass quickly.


10 minutes later and beautiful sunshine at Þingvellir National Park
10 minutes later and beautiful sunshine at Þingvellir National Park


24) Don’t expect to see the Northern Lights


The Northern Lights are only visible in the winter months. There are plenty of websites you can check to see if they’ll be visible that night. I suggest checking these first and if at 5pm they say they’ll be visible, book a tour for 9pm or 10pm that night. 

We took a tour with Reykjavik Excursions for £45 each. Biggest waste of money. They take you to a car park where you stand in the cold for an hour and see nothing. They offer you the chance to go another night for free but I didn’t see the point.

The only way to get photos of the Northern Lights is with a proper camera, using the right settings and a tripod. Not with a camera phone. I even downloaded the iPhone app Northern Lights Photo Taker App. Save yourself £0.99 and don’t bother.

Also, most of the photos you see on Instagram of the Northern Lights, aren’t anything like you see with your own eyes. 


Northern Lights on an iPhone
Northern Lights on an iPhone


25) Go to the cinema


If you can’t sleep because of the 24 hour daylight in the summer or you need something to do on the cold winter nights, head to the cinema. It’s one of the most popular pastimes for the Icelanders and nearly all the films are in English.

6 Replies to “25 tips for visiting Iceland on a budget”

  1. Of all the places you have visited this attracts me the most. Other people have told me to go and now I must. It is just like another world with the strange buildings and the surreal blue lagoon. I am not too bothered about the Northern Lights but would like to see the people and way of life. I went to Norway when I was 20 and could not believe the high price of the jumpers. It looks like nothing has changed and only rich tourists buy them. My friend went to Greenland for the day. Our next holiday, I think.

    1. I wanted to do a day trip to Greenland but the cost was around £1,500 when I was looking and that’s totally out of my budget! In Iceland I took the regular tours with the big companies, if you really want to explore then I suggest either hiring a car or researching a good guided tour that’s more personalised. EasyJet fly from Manchester everyday and if you book in advance you can easily fly for under £100, shame everything is so much more expensive when you get there!

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