ICELAND – Traveling the ‘Land of Fire and Ice’ on a Budget!

“I still don’t know why, exactly, but I do think people can have a spiritual connection to landscape, and I certainly did in Iceland.”

– Hannah Kent

If you recently added Iceland to your bucket list of places to visit in your lifetime, you are among the many people who have realized this gem is not to be missed! In 2017 the number of tourists to Iceland crossed 2 million, over six times the entire country’s population. While Iceland is quickly attracting more tourists, it is also one of the most expensive places to travel on this planet. Just to put this into perspective, a liter of petrol in Iceland costs US$2.12, which translates to nearly $8/gallon!

source: locatify

Iceland is one of the few places where you will not pay an entrance fee or ticket to visit any of its natural wonders. While the government of Iceland could easily make a ton of money charging tourists, I was pleasantly surprised when one of my AirBnB hosts told me “Who are we to charge for nature’s gifts?!” It was one of the rare occasions of deep social conscience I experienced after a long time!

Viking Village

I do not need to emphasize the fact that air travel is often cheaper during weekdays and isn’t planned around major holidays. While you may try budgeting your trip to the best of your efforts, there are certain aspects that can be overlooked. Here are some minor, yet important details that can impact your wallet that you must consider before you plan your trip through The Land of Fire and Ice:


A single road, Route 1 encircles this beautiful country and the best way to explore this nature’s paradise is driving along its ring road. Car rental companies offer great deals on daily car rental pricing, but purchasing rental insurance is usually the biggest expense on the agreement.

Having auto insurance is certainly a requirement, but relying on the expensive pricing of the rental agency can be easily avoided. There are several credit cards that offer auto collision and damage protection for rental cars when you utilize the credit card for making payments. The insurance alone will save you a few hundred dollars depending on the number of days you rent the vehicle.

My Ride

Another large expense when renting a car, is the navigation or GPS device. This alone is charged between $7-$10/day and can leave you behind on your budget quickly. Instead you could opt for a mobile hotspot that is offered by major car rental companies at nearly half the price. This way you can easily connect your phone to the hotspot and use Google Maps for navigation. Another alternative is to simply rely on a mobile data plan by purchasing an inexpensive data-only SIM card. While you cannot save on the expensive gas, you can easily save up on insurance and added accessories.


When planning your stay in Iceland, finding hotels can be the most difficult task considering the limited and expensive options available. You will find some great hotels in major cities like Reykjavik, Hofn, Vik and Akureyri, but these are heavy on the pockets because of their apt tourist location. While researching cheaper alternatives, I realized that even backpacker hostel pricing was equivalent to a regular hotel.

AirBnB farm near Egilsstaðir

The best way to save on accommodation is living away from the major cities. Avoid living in the prime areas where most tourists would reside and opt for locations that are not too far away from the major attractions. You can find a ton of AirBnB rentals at half the price at great locations and offering the company of mother nature. When looking for AirBnB properties, it is best to use the map feature for Iceland and look for rentals that are in close proximity to Route 1. A 15 minute drive away from the ring road can save you $30-$70/night!


Another major expense that can drain your pockets is the several meals during the day. The number of restaurants on Route 1 are limited to a handful and do not offer meals for the budget conscious. Instead of relying on pricey restaurants, opt for grocery store items from Bónus or Krónan which are cheap budget stores available all over Iceland. It can save you a fair amount of money when you can purchase 6 cans of beer at the store as opposed to $11 for a single beer at a restaurant. If you wish to explore like a local, you also have to eat and live like a local.

In order to save time on grocery shopping, I had even purchased some ready to eat meals, that came in handy when I wasn’t staying in close proximity to a store. You must keep in mind that Iceland is a country with 60% of the population residing in the capital city of Reykjavik, making it difficult to find several amenities while on the road. For those needing a buzz after a day long hike, consider purchasing a bottle of your favorite liquor at the duty free store at Reykjavik Airport.

When our minds are mesmerized with the beauty the world has to offer, we often tend to overlook our expenses only to realize our oversight later. Some of the smallest details can save you hundreds of dollars leaving you with a surplus to be used on your next adventure. I hope this information can be useful the next time you plan your travel. Until then…

Be Frugal, Be Smart, Be Rich!

“If You’re Twenty-Plus, Physically Fit, Hungry to Learn and Be Better, I Urge You to Travel – as Far and as Widely as Possible. Sleep on Floors If You Have To. Find out How Other People Live and Eat and Cook. Learn from Them – Wherever You Go.”

– Anthony Bourdain

PS: If you are interested in viewing my 8 day planned itinerary to Iceland, feel free to contact me.


Related Links:

Travel your way to Happiness

4 Reasons why saving money should be your #1 priority before turning 30!

6 thoughts on “ICELAND – Traveling the ‘Land of Fire and Ice’ on a Budget!

  1. Radhika Shah

    Your thoughts and expertise on life , travel, religion, investment, finances are so inspiring n helpful …. you sound so intuitive , sensible on every topic you have discussed as of now … thank you for being helpful

    Liked by 1 person

  2. Pingback: Iceland – Traveling through the Land of Fire and Ice on a Budget! – best checked luggage flying

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s