It’s no secret that Iceland is an expensive country. Like, “25 dollars for a basic hamburger and 8 dollars for a magnet” expensive. In fact, Iceland was probably the most expensive country out of the 50-ish or so countries that I’ve traveled to so far. I know that probably isn’t the best way to start a blog post about saving money in  Iceland, but it’s better to figure it out sooner than later :P 

… But it doesn’t have to be that way! 

I flew out to Iceland, braced the freezing -5C temperatures, and spent money on completely unnecessary stuff — so that you don’t have to! Learn from my mistakes as I present to you: the 15 Easiest Ways to Save Money in Iceland.

Ready? Let’s go! 

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Know How Much to Budget Before You Go

The reason why Iceland is so expensive is because a) it’s and island and b) everything has to be imported. It’s better to know the average costs beforehand so you can properly adjust your budget before you travel. To get a better idea of the typical costs in Iceland, here’s a quick list:

FOOD: Around $25 to $35 per meal at an average restaurant
ACCOMMODATIONS: $130 ~ $150 per night at a standard hotel near the center
TRANSPORTATION: $4 for a bus ticket in Reykjavik
CAR RENTAL: $40 for a small car or $65 for a 4×4
TOURS: Tours average around $80 to $100 per person 

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You Can See Iceland in As Little As One or Two Days

Before we dive into the actual Iceland budget tips, let’s figure out how many days you plan to be there. 

The beauty of Iceland (besides its gorgeous waterfalls and beaches! ;P) is that you can enjoy the country no matter how much time you plan to be there — you can see Iceland in one day, three days, one week, and heck, even one month. 

When you start planning for Iceland, consider how many days you’ll be there. If it’s part of a bigger multi-country trip, you can even see Iceland in one or two days during an extended stop-over. If you book your airfare ticket with Icelandair, you can stop in Iceland from 1 to 7 days at no additional cost. 

If you only have one day in Iceland, you can still reserve one night in a hotel, book a full-day tour to Iceland’s top attractions, and then fly out the next morning. 

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Saving Money On Food: Shop at Bonus

Now that we know how much money to budget for Iceland (and how much our wallet is going to cry), let’s start with the first life hack to save money — Shop at Bonus!

Bonus is an Icelandic supermarket that sells affordable groceries and can be found all around the country. In fact, there are 14 stores in Reykjavik alone! This is a great place to stock up on food that you can make yourself, such as bread, ham, and cheese to make a sandwich, yogurt, snack bars, etc.

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Saving Money On Water: Drink the Tap Water

While you’re out there shopping at Bonus, don’t buy bottled water! 

That’s right: you can save a bunch of money simply by drinking the tap water. Not only can you drink Icelandic tap water, it’s actually encouraged — in fact, most of the tap water comes from springs in the ground and doesn’t contain any pollution. 

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Plan Your Keflavik Airport Transfer In Advance

One of the first things that most travelers arrange when traveling to a new country is how to get from the airport to the city. It’s important to see all of the options available, whether it’s taking an airport bus, metro, train, taxi, shuttle, and so on. 

Iceland’s main international airport is called Keflavik Airport (KEF) and is located about 50 kilometers (31 mi) from the city center. 

With this in mind, what is the best way to get from Keflavik Airport to Reykjavik? Since Iceland is so spread out, there are really only two viable options: taxi or airport bus. Before I traveled to Iceland, I did a quick search and realized that a taxi ride can cost anywhere from $120 – $150 USD for a one way trip (!!). If you take a taxi to and from the airport, you’ll spend $250 to $300 USD – money that you could have used for a tour, souvenirs, or tickets to the Blue Lagoon.

Thankfully, there’s a cheaper option to get from Keflavik to Reykjavik center — the Flybus. It’s almost 5 times cheaper than taking a taxi and gets you there in about the same timeframe. The Flybus departs about 35-40 minutes after every flight arrival, so it’s convenient as well :) 

There are two options from Keflavik Airport — you can take the bus that will get you to the city center, or take the bus that will take you directly to your hotel. 

Here are the links if you want to book a transfer:

Transfer between Keflavik Airport & Reykjavik City Center

Transfer between Keflavik Airport & Reykjavik Hotels 

 

Blue Lagoon – Tip #1 

While we’re on the topic of Keflavik Airport, let’s talk about the Blue Lagoon. 

Iceland’s most popular tourist attraction — the Blue Lagoon — is located on the way to the airport. To save time and money, I recommend that you visit the Blue Lagoon either on the way to or on the way from the airport. That way you won’t need to make an additional trip to enjoy the thermal waters. 

PRO TIP: Don’t forget to stop by the “mask bar” when you’re at the Blue Lagoon. It’s located on the left side when you enter the pools, and one mask is included in your admission price! Your skin will thank you. ;) 

Blue Lagoon – Tip #2 

This tip is going to be for those who want to experience the magic of Iceland’s thermal water but don’t want to shell out $55 to visit the Blue Lagoon. 

There are plenty of thermal pools in Reykjavik that get its water from the natural springs surrounding the city. Best of all, the cost of admission is around $10 USD! 

For a full list of pools (there are 17!) and thermal pools, you can check out Reykjavik’s official site here.

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Book an Accommodation with Breakfast

One of the quickest and easiest ways to save money in Iceland is to book a hotel or hostel that has breakfast included. We did this on our trip and saved at least $60 per person during the three days that we were there! 

You can see a full list of hotels in Iceland that include breakfast here. Just type in your days and click the “Breakfast Included” under the list of filters on the left.

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Pack Snacks From Home

If you don’t want to pay $20+ for a measly sandwich or $5+ for a tiny Icelandic protein bar (heck, is there even any protein in there??), be prepared and stock up on snacks at home. 

For our trip, we grabbed snacks that were light, easy to pack, and non-perishable.
We stuffed them into our pockets and backpack (you’d be surprised how many you can stuff in a ski jacket!) when traveling, which really helped curb our appetite until the next meal. Here are just a few ideas to get you started:

 Cliff Bars
 Vegan Bars
Raw almonds
Pretzels

TIP: I particularly liked protein bars and almonds because they kept us fuller longer. It’s a great deterrent against mindless snacking! ;) 

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Save Up to $60 With a Free Walking Tour

One of my absolute favorite travel hacks (no matter the destination!) is to join a free walking tour in the city where I’m traveling. Not only will you meet other cool travelers, you’ll also get a great overview of the destination and it’s often more economical than going for a private tour. As one of my friends once said – the information is still the same, but the price isn’t. 

Thankfully, there’s a free walking tour of Reykjavik that’s run by City Walk. It takes about 2 hours and shows you the most popular and interesting tourist attractions around the city. We had Disa as our guide and had so much fun on the tour — she has a degree in tourism and was full of interesting information about Iceland! 

One thing to note – although it’s marketed as a free tour, tips are always appreciated (especially if you liked the tour!). Also book in advance. :)

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Save Money on Iceland Activities & Museums 

These are two tips in one, so I’ll break it up for easier reading:

Activities – Plan All Your Activities on One Day and buy the Reykjavik Card 

Like many other cities, Reykjavik has its own version of a “city card.” 

For one low price, you get a bundle of activities, museums, and discounts at restaurants and stores. Although we didn’t know about the Reykjavik City Card when we visited (do your research, kids ), it’s a really good deal. 

To maximize your time and value, I recommend looking through everything that’s included in the city card, planning all of your activities in one day, and then buying the 24 hour Reykjavik City Card. 

Reykjavik Museums 

If you plan to visit the National Museum and Culture House, they offer a neat little bundle. Since they’re part of the same group, when you buy admission to one museum, you get the other “for free” (included in the price of your ticket).   

Also, if you’re thinking of visiting the Culture House — do it! It was one of the highlights during my trip to Iceland, especially the cool library on the second floor. :) 

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Northern Lights: Book a Tour OR Do It Yourself?

The Northern Lights are one of nature’s most beautiful phenomena, and can be seen in Iceland from September to March.

However, as much as I love to save money, I would recommend booking a tour if you’re keen on seeing the Northern Lights.

I recommend going the tour route because it’s super convenient. You have a driver who knows all of the best Northern Lights spots (and can navigate the icy road!), a tour guide who will give you photography tips and interesting facts, and you can bundle up in the bus if it gets too cold for you. Plus, who doesn’t like free hot chocolate?

We booked this Iceland Northern Lights Bus Tour and loved it. If you’re planning to go this route, I recommend scheduling your tour as early as possible. We scheduled to go on our tour on the first night when we arrived (jetlag takes a backseat when you want to see the Northern Lights!). Unfortunately, a few hours beforehand, we got the news that the lights weren’t strong enough and the tour wouldn’t happen that night. We were promptly rescheduled to the next day, everything went smoothly, and we saw those gorgeous blue and green curves of light in the sky!

Also, it’s worth noting that the Northern Lights are never guaranteed — It is, after all, mother nature. If you booked a tour and couldn’t see the lights, or couldn’t reschedule, the tour operator will refund your money. :) 

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Don’t Feel Obligated to Rent a Car

Should I rent a car in Iceland? was one of the biggest questions that we had before we left for our trip. There are arguments to be made for both sides — it’s cheaper to rent a campervan than to stay in hotels, or that car rentals and gas are extremely expensive in Iceland — and ultimately we ended up not renting a car. 

The two main reasons why we ended up not renting a car – and saved money in the long run! – was because the places that we want to go to were included in guided tours and because costs can quickly add up. 

For example, to rent a car would cost us about $65 per day for a regular 4×4, plus insurance, tolls, and gas. In Iceland, you can expect to pay about $2 per liter, or around $75 USD to fill up a full tank of gas. Likewise, most cars in Iceland have manual transmission, and you would need to request an automatic car in advance if you can only drive that.

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There’s No Need To Tip In Iceland

Coming from San Francisco where the average tip is around 20%, I was pleasantly surprised to learn that tipping isn’t expected in Iceland. 

Employees in restaurants and hotels earn a living wage, and in many cases, a 15% tip is already built into the prices at most restaurants. Of course, if you loved the service, feel free to tip – it’ll be accepted with a smile. :) 

TIP: Whenever I travel and take a tour with a local guide, I like to give out a small gift from my city (such as Ghirardelli Chocolates from SF). It’s a nice addition if you tip and shows how much you appreciate their service! 

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Get Money Back While You Shop

Getting money back in Iceland? Yes, it’s possible!

If you purchase goods that cost more than 6,000 ISK (about $50 USD) in a store, you should ask for a VAT form so that you can get your Value Added Tax (VAT) back when you leave Iceland. The current VAT rate is 24%, so you can get a hefty amount if you take the time to collect your receipts and organize them! 

When you arrive at the airport, there’s a special kiosk where the employees help you fill out the form so you can get some money back… so you can promptly spend them at Duty Free. ;)

For more information, the official Icelandic Customs website has a whole page on the process – click here to learn more. 

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IN CONCLUSION…

Let’s take a look and see how much money we would save if we took just a few of the suggestions mentioned above…

$60 – Substitute a free walking tour in place of a paid bus tour
$200 – By taking the Flybus instead of a taxi to the airport (round-trip)
$40 – Trading a trip to the Blue Lagoon and visiting a local thermal pool in Reykjavik instead
$20/day – Booking an accommodation that has breakfast included

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Adding it all up, you can save more than $300 just by tweaking a few things in your travel plans.

With that in mind, what will you do with an extra three hundred in your pocket? ;)

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Do you have any Iceland money saving tips that I didn’t cover? Let me know in the comments below!

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