Some of you may think it may be slightly difficult to visit ‘the land of fire and ice’ Iceland on a budget as the attractions are slightly steep. But there’s plenty of room for you to cut corners and still have the most memorable trip of your life! Let’s find out how!

1. Breathtaking views   

Iceland is a land of contrasting landscapes. This means that you have access to the gorgeous sceneries without having to pay a penny. The glaciers, the volcanoes, the waterfalls, the mountain ranges will leave you mesmerised. It goes without saying that the sceneries will be the highlight of your trip. You know there is only little that money can buy. So you can be away from spending money and enjoy the non-materialistic pleasures of life! Do remember to carry your camera as you will end up capturing the best photos of your life. Nature is at her best in Iceland. 

2. Spend nothing to catch a glimpse of the Northern lights

For those of you travelling in the winters, the trip is probably dedicated to chasing the Northern lights. Well, you are absolutely on the right track. It is not every day that you can see the auroras dancing in the night sky. The best part about this is that you do not need to burn a hole in your pocket to catch this defining moment!

There are plenty of bus tours and exclusive cab packages available in Iceland, which would take you to view the Northern lights. However, if you are on a budget, I would suggest that you do some thorough homework! You can actually avoid paying for this and do some Northern data hunting on your own. If you have already hired a car for the trip, keep driving to the outskirts of the city of Reykjavik. Keep your map handy, of course, and speak to locals on which would be the best viewing spots.

Head to an open land without any buildings blocking your way—that is where you have the highest chances of seeing the auroras. Iceland’s weather is extremely unpredictable. So download a couple of applications, and keep a view on Facebook groups to get the hang of when the Northern lights are likely to appear that night. And, you are sorted! 

3. Head for a warm bath at natural springs

We all know that the Blue Lagoon is super amazing and offers a relaxing spa. But yes, it also comes with a cost. You may go for one spa there. But if you are on a budget, it is most likely that you would want to avoid it. Well, you have nothing to worry about. The list of natural springs where you can take a warm bath for free is quite long in Iceland. Wherever you go for a drive or hike, speak to locals. In a quiet corner, you will find a spring running its magic where you can rejuvenate yourself with a free spa!

4. Go to the flea market for shopping

Iceland’s fashion scene is quite diverse, and the apparel collection at the boutiques in downtown Reykjavik may be too tempting! Oh, and the accessories! But if you are strapped on budget, do not spend a fortune here. Instead, head to the flea market, where you may have to hunt a little bit but will find excellent stuff.

5. Buy second-hand music records

The wonderland of Iceland offers amazing music. You should definitely check out Icelandic music if you have not already when you are there. You may want to pick up a few records for yourself to bring back home. The downtown shops offer a good range of records. I would suggest that you head to the hidden gems—the second-hand music records shops which offer excellent collections at a bargain price. Some of these shops are underground. So do not miss them!

6. Head to the pub during happy hours

The capital city Reykjavik has a super happening nightlife. You must definitely go pub hopping to experience the party scenes in Iceland. So do take advantage of the happy hours offered by almost every pub downtown on your budget trip! These hours are typical during the evening and vary slightly from one pub to the other. So get out there, make friends, and party!

7. Enjoy the beer nights at hostels

If you really enjoy socialising and pub crawls are working out to be too expensive, keep track of beer nights at hostels. The hostel nightlife is no less interesting than downtown cafes. Most of them have chilled ambience, great crowd, and beer parties on the terrace under the night sky. You would spend less money as compared to a pub, and still have a great time!

8. Stay in hostels/ dorm rooms

Accommodation is a major cost when planning any trip. Choosing good accommodation does not mean you have to spend a fortune on it. When on a budget trip to Iceland, you can, in fact, ditch the fancy hotels and go for a hostel dorm. 

Hostels offer both mixed and female-only dorms, so take a pick whichever you are comfortable with. Some of them also include breakfasts which are another money saver!

You not only save money but also have a great time enjoying the vibrant hostel culture.

9. Stay in an Airbnb

If you want a little more privacy and still do not want to spend as much money as you would on a hotel, opt for an Airbnb. This will give you a bed and breakfast experience and a taste of the local Icelandic culture if you are staying with hosts. 

10. Cook some of the meals

Who doesn’t like to eat out when in a new country and explore the local food? But eating out all the meals can be quite expensive. When on a budget, I would advise you to cook some of the meals. This way, you will save a lot of money to spend on your favourite attraction!

Hostels and Airbnb accommodations have amazing kitchens! So why don’t you head to the markets, buy some local vegetables, and dish up some magic in the kitchen? You can even share some of it with your international friends and give them a taste of your authentic cuisine. Open a couple of beer cans and have fun!

11. Buy alcohol from the supermarket

You are in a mood to drink, and you have already overshot your budget! Don’t worry—you do not need too much money to have a good time on your budget trip. Head to the supermarket, and pick up some Vikings beer. Also, do not forget to check out the wine section. Now that you are sorted on the alcohol part buy some pre-cooked meals. Heat them in the microwave, plate them nicely. Open the bottle of wine. Bon appétit.

12. Be your own barista

During long hours of sightseeing, I end up spending a lot of money on coffee. If you are a caffeine addict like me and have a long day of activities ahead of you, carry a thermos flask of your favourite tea or coffee with you. Keep sipping on it while you are outdoors, and rely less on the barista!  

13. Carry enough woollens

Some of us make the mistake of not packing well, and leave important clothing out of the suitcase! We are a little casual and end up thinking we can pick up once we reach the destination. 

The Iceland weather gets cold in the blink of an eye. So even if you are heading there in the summers, pack enough woollens. Throw in a windshield jacket, beanie, scarves, and thermals. Or you will have to end up buying them in Iceland, which will make a dent in your budget trip.    

14. Pick up thoughtful yet cost-effective souvenirs

We love bringing back gifts for our friends and family. When on a budget trip to Iceland, we need to be a little more innovative with our gifts to ensure they are thoughtful yet cost-effective.

I have realised over time that some of the best gifts are the ones that cost pennies. All you need to do is put your heart into it. Instead of opting for the magnets and key chains which your friends probably already have lying in their closet, buy postcards in bulk and write customised messages. You can also print photographs of the most beautiful landscapes from Iceland, which you have taken during the trip, and slip them with the postcards. 

Buy chocolates, candies which are souvenirs but do not cost much. You can also save some of your Icelandic currencies to give them away as gifts. Kids love collecting them.     

15. Hitchhike

Have you hitchhiked on a trip before? If you haven’t, Iceland is probably the best place to do it, as you do not need to be constantly on your guard here. Iceland is one of the safest places for women to be in. People who give you a lift are extremely polite and will even give you local tips! Wait on the side of the road where the car can stop and ask for a lift. Hitchhiking is a great way to save money on budget trips while also getting to know new people!

16. Avoid cab rides

Iceland does not have Uber but has a long list of cab services that are quite reliable. But if you are on a budget, ditch cab rides. Instead, rely on a whole range of other transport services to make the trip pocket-friendly. 

Iceland has buses for airport transfers and a good network of buses for sightseeing as well. You can choose a hostel in the city centre which will make it easier for you to access the bus network. 

There is a lot you can explore on foot as well, and biking is another great option to go around the city at a low cost. Biking is a great physical exercise, and you can reach unexplored locations on it.  

17. Do not spend on bottled water

Bottled waters are an absolute ‘no no’ when you are in Iceland. There is no need for you to spend on this expensive packaged water as the tap water is absolutely safe to drink. So wherever you go—be it a cafe or restaurant, ask for the tap water! Ditch the bottled water, and you will be surprised at yourself how much money you have saved for your last-minute shopping.

18. Go for free walk tours

I always make it a point to include free walk tours on my budget trips. These walk tours take you to places that regular tourists would not frequent. So you will be actually lucky to explore the nooks and corners, which you would probably not know of otherwise. At the end of the walk tours, you tip the guide for what you think it was worth! To compensate her/him for the time they spent with you on tour. 

Walk tours are budget-friendly, and yet you end up knowing so much about the local culture! 

19. Access free wi-fi

We rely a lot on mobile data to connect with our family members and look up attractions to plan the itinerary! Do not worry about buying too many internet packs. Instead, be a little smart and access free wi-fi at the hostel. Museums, malls, buses, and monuments – all of them have wi-fi. So take advantage of the free wi-fi and connect with your closest ones. 

Book your air tickets and accommodations in advance, and head out! I can see that you are confident of making the most of your trip without burning a hole in your pocket. 

Pack your backpack right and set out on your trip! Do tell me about your experience of travelling to Iceland on a budget in the comments below. Sharing is caring!