Guest Post: Iceland on a Budget

Guest Post: Iceland on a Budget

Guest Post & Photos by Laura Frasse

Back when I was a single lady living in New York City, my co-workers and I would often dream about places for a quick getaway. Living in New York City had its many perks, but I longed for nature, for waterfalls, and for trees (Central Park doesn’t count!). A few google searches later, we found cheap flights to Iceland. Boom! We were booked! However, while the flights from JFK were cheap, almost everything else in Iceland is NOT cheap. Ten dollars for a beer? Five dollars for bottled water? What had we gotten ourselves into? For three gals on a budget, we were determined make this trip work. Nothing should stop you from planning that soak in the Blue Lagoon either. If a trip to Iceland is something you want to start planning, check out these tips for traveling to Iceland on a budget.

When to go

Iceland is pretttty far north, so even the summer months are quite cool. However, summer is the most popular time to go, with July and August being the most popular and the most expensive. If you are okay with a little cooler weather try May, June, September or October for your trip. The closer you get to winter, the less daylight you will have, but you might have the chance to see the Northern Lights and you’ll save money by visiting in the “off-season.” If you are up for a wintertime adventure, plan your trip for December, January or February. But bring your winter coat!

Image of icebergs in Iceland


Cheap places to stay in Iceland can be hard to find, so do your research! We booked all of our hostels in advance, which saved us some money and the worry of trying to find a place to stay each night. Plus, hostels were much cheaper than hotels. If I were going back I would try to use Airbnb or VRBO or another site that has cheaper options for places to stay. Those sites didn’t exist back then! Check out these dreamy rentals for Iceland on Airbnb and VRBO!

If you are up for a real adventure, pack a tent and camp! Iceland is absolutely gorgeous and has some great places to camp. It will save a ton of money.

Image of scenic Iceland



We decided to rent a car in Iceland which was the best option for us to get around. Public transportation can be hard to find. If you rent a car, just make sure you budget for gas which can be expensive. We split the cost of the gas between the three of us and the cost of the rental car.

Image of Iceland by boat

Food and Drink

Food is one of the most expensive parts of Iceland. And drinks are even more expensive. We decided to splurge and eat out a few times to try the local cuisine (shark!), but most of the time we went to grocery stores and bought things we could share. For example, we would by a box of instant oatmeal or granola bars and share them between the three of us. And all of our hostels had a community kitchen so we would plan on cooking a cheap breakfast or dinner each day to share. Lunches were often spent on the road with snacks in the car. Just keep in mind, fresh fruit and vegetables are the most expensive items in the grocery store, so if you can, shop local or at side of the road market stands.

Free Activities

There are tons of free things to do in Iceland! Above all, get outside! Hiking is one of the best activities you can do in Iceland. There are plenty of places to explore so you won’t run out of free things to do. Plus, just driving around the golden circle you will run into plenty of sights you’ll want to pull over for and check out.

Image of quaint church in Iceland

Pro Tips

Resist the wool sweater: You’ll see wool sweaters all over the place to buy in Iceland. But the real wool can be quite pricey. Unless you really really plan on wearing the sweater when you return to the USA, resist the urge to buy a wool sweater as a souvenir. Save your money!

Exchange Cash in the USA: Check with your bank about getting foreign currency before you depart. The exchange rate will be better and you won’t have to worry about using the ATM with their huge service charges, when you arrive in Iceland. And if you use a credit card for a rental car and hotels and hostels, you won’t really need a lot of cash.

Hot Springs: Iceland is full of hot springs that are free to visit. I mean, hot springs are everywhere! We found a hot spring pool on the side of the road that we were able to enjoy for free. But, hopefully this budget guide has saved you enough money to splurge on the Blue Lagoon. It is absolutely worth the entrance fee. You don’t need to schedule a spa treatment or massage to enjoy the pools and waterfalls. We paid the entrance fee and then stayed there almost all day to get our money’s worth. It is a must-visit for any trip to Iceland!

Image of Hot Springs in Iceland

So if you have been dreaming of visiting the Land of Fire and Ice but the cost is daunting, book those tickets! The trip will be totally worth it and won’t break the bank!


Laura Frasse lives in Colorado Springs with her husband, Chris. She works for the Air Force and Chris serves in the Army. Together they have created a blog to document their many duty stations and travels across the world.

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