Iceland on a budget
1. Take advantage of the free geothermal baths
One of the most expensive activities is going to some of the countries geothermal Spas - but they're not your only option if you want to experience natural hot water outside (even in winter!).
My absolute favourite one was a hot thermal river in a Reykjadalur valley - take a beautiful and easy hike in the mountainous area to then get into a warm spring. There are places you can use to change, bridges and ladders that make walking in the area nice and easy.
And the best part - it's totally free (except for the parking area but definitely not in the price of the most popular paid geothermal spa - Blue Lagoon - where the cheapest tickets cost around USD 70 (as for mid 2023)
The guide featuring the best paid and free geothermal baths coming soon.
2. Don't buy water
You can bring a reusable water bottle with you or buy one in the country - the point is, the water quality everywhere is excellent. You don't have to worry about drinking it straight from the tap or a river. Some streams smell funny - there's nothing wrong with them, it's just that they have higher amount of sulphur. My advice is to skip this one and refill your stocks when you find a water source without the smell ;)
3. Buy food at a discount supermarkets
You can buy groceries everywhere: the point is to know which shops to choose and which to avoid in order to save some money. The most expensive store in Iceland is 10-11. Comparing to cheap supermarkets, the prices there can be up to 50% higher!
So which shops to pick? The best ones are Bónus, Nettó and Krónan. Even if they might not be as common as 10-11, they're located around the whole country - choose them and your wallet will definitely thank you!
4. Don't buy alcohol
And if you really have to - buy it at a duty free. The tax Iceland put on alcoholic beverages is huge - it’s one of the most expensive things in the country. So if you want a chance to skip it, go to the duty free zone at the airport and buy drinks that are much cheaper than anywhere else in the country.
Option number 2: use happy hours at bars or pubs/ The majority of these spots have them to attract customers and they offer much cheaper alcohol for a limited amount of time.
5. Consider renting a campervan
Usually seeing an entire country would require you to pay for renting a car AND for accommodation every single day. Renting a campervan gives you 2-in-1. This method of travelling is very common in Iceland (and is the way I decided to travel. Fully recommended!).
Take into consideration that wild camping is strictly forbidden in Iceland (there are a few exceptions like having a permission from the land's owner but let's be realistic, it's not always - if ever - going to be possible) so you'll have to pay for a camping ground. But the cost is minimal compared to a price you'd pay for a room in a hotel. In summer you can find some camping sites that are totally free too!
A guide with the best campsites around Iceland is coming soon ⌛
Some of the most popular campervan rental companies: Go Campers, KuKu Campers, Indie Campers, Happy Campers and Cozy Campers.
6. Be careful about misleading discounts
There are special discount cards you can buy (!) to save some money. And they're great but only if you hit certain conditions. One example, if you're going camping (van or tent), you might want to buy a Camping Card. The catch here is it's not valid for all the campsites around the country (although it covers the majority) + it's only going to save you money if you're travelling for around (or more than) 2 weeks. Moreover, although the card allows you to stay at select campsites around the country for free, you'll still have to pay an overnight tax (USD 2,50 per person). Not a lot but worth calculating for your specific trip.
As the card is valid for 30 days, some people try to sell it to newcomers at the airport when they leave - I haven't tried it so you'll need to do some more research in this field!
7. Prepare your own meals and drinks
Iceland has some incredible original dishes - I honestly recommend you not to skip trying them. But if you're willing to spare some money, don't dine in a fancy restaurant every single day: rather buy groceries in one of the cheap supermarkets mentioned above and prepare your own meal!
If you went for a campervan option, your car will surely be equipped with a gas stove, pots and pans - everything you need to prepare something delicious on a budget.
If you want to enjoy cheap food and drinks, many people recommend visiting gas stations. And I confirm, especially N1 has incredible coffee with a lot of stuff you can add to it for free (not only milk and sugar but also numerous syrups like a chocolate one!). Some people decide to visit banks and other public places that often offer coffee and tea for free - if you're ok with going there just to pick the freebies and leave, give it a go!
8. Get a tax refund
Before you fly home, there’s a booth inside Keflavik Airport where you can get a small tax refund. Of course, some conditions apply: you have to have purchased over 6,000 ISK of goods (~USD 45,50) and live outside of Iceland.
Famous Icelandic sweaters are great souvenirs for you and as gifts for your family!
But going back to saving you some money: to get the refund, you need to show at the airport booth with the goods, the receipts (so keep them all!) and your passport.
10. Get a petrol discount tag
There is a good chance that if you are renting a car or campervan, that your keys will come with a discount card or discount key fob. When you pick up the camper, attached to the key is a little N1 discount tag. When you fill up with petrol, all you need to do is swipe this tag first at the pump, and you’ll receive a small discount. It’s not much, but every little bit helps when you’re trying to save money in Iceland. The average cost of a full tank of petrol for the Go Smart Camper 2-pax is between 6000–7000 ISK. Petrol is one of the biggest expenses during a campervan trip through Iceland.
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