Iceland is a dream destination with its stunning waterfalls, volcanoes, glaciers, dramatic landscapes, and the chance to see the northern lights. It is on many travellers’ bucket lists. But let’s face it, Iceland has a reputation for being one of the more expensive destinations in the world. While it’s true that prices can quickly add up, with a little planning and some smart choices, you can experience Iceland without breaking the bank, (almost) without any compromises. I managed to travel around Iceland for 6 days for less than £800. Here are my top tips:
Find cheap flights
Flights to Iceland can be surprisingly affordable, especially if you book in advance and travel during the off-season which is from September to April (when you have better chances to see the northern lights). From the UK, easyJet and Play are the most affordable options. I use Skyscanner to find the best deals then book directly onto the airline’s website.
Rent a car
Renting a car is the easiest and most affordable way to explore Iceland. If you can’t drive, there are tons of day tours from Reykjavik on Get Your Guide or you could even book a group trip but these are usually very expensive. If you’re planning on staying over 3 days, you definitely need to leave Reykjavik and explore more of what this stunning country has to offer. We found driving super safe in Iceland, as there isn’t a lot of traffic. Roads are usually limited to 90km/h.
We had a really bad experience with the rental company we booked in advance, so do your research before you go. Most rental company ask you for a credit card so make sure to have one with you on the trip! My recommendation would be to rent through Blue Car Rental. They are not the cheapest but they are extremely reliable. Price was around 67,000 ISK (£380,00) for 6 days.
Stay in Airbnbs
Booking accommodation on Airbnb is almost always cheaper than Booking or other hotel providers. This is also true for Iceland. I know some people have had bad experience with Airbnb, and I have too (I was once stranded in a shady neighbourhood in L.A. at night after a 12-hour flight…). But I have had way more good experiences than bad with the platform, and their customer support are always extremely helpful. That said, we’ve stayed in 2 Airbnbs and 2 hotels. Hotels were generally at least £40 more, but the two that we booked were ideal for seeing the northern lights, so where we compromised on food we thought we could spend a bit more on accommodation. We managed to find pretty cheap options and paid around £380 for 5 nights.

Avoid eating out
Restaurants in Iceland can be quite pricey. If you enjoy dining out and drinking alcohol, you’ll need to make some adjustments. I can’t give you an exact price for a meal in Reykjavik since I never ate out during my stay. Instead, we stocked up at Bónus and Krónan, two of Iceland’s largest supermarket chains, buying salads, bread, cheese, and other ingredients to make sandwiches during the day and heat up soups at our hotels in the evening.
Activities
Many of Iceland’s most stunning attractions are free to explore. Iconic waterfalls like Gullfoss, Seljalandsfoss, and Skogafoss have no entry fees. Thingvellir National Park is also free to visit, though there is a small parking fee (around £5).
If you’re visiting in winter, you can witness the northern lights without paying for a guided tour—just check the forecast and find a dark spot. Booking an Airbnb away from light pollution can also enhance your chances of seeing the aurora.

Book the right tours and excursions
During our stay, we decided to not book a Northern Lights tour and try something different instead. We went on a Glacier Hiking Tour in Skaftafell with Troll Expeditions, and it was absolutely incredible! While the tour was a bit pricey (£115 per person), it was completely worth it— it’s not everyday that you get to hike a glacier! Our guide was the kindest person we met during our trip, making the experience even more special. I highly recommend this tour if you’re looking for a unique adventure.
We also considered booking a cave tour, but since they can be even more expensive, we decided to skip it. However, if you have a little extra in your budget, they’re definitely worth checking out!
What we actually spend in 6 days in Iceland
Here’s a breakdown of our expenses during our trip to Iceland in February 2024. I haven’t included flight costs since I work for an airline and get significant discounts on tickets. The prices listed are for two people, so for one person they are around £635 + flights. If you’re traveling solo, you might consider joining a group trip if that suits you, but if not you’ll still likely spend less overall!
Car rental | £380 |
Gas | £200 |
Accommodation | £380 |
Tours | £230 |
Groceries | £80 |
Total | £1,270 |
Final thoughts
Travelling to Iceland on a budget is definitely possible. With a little research, planning, and creativity, you can experience its beauty without spending a fortune. By saving on flights, accommodation, food, and tours, you’ll have more to spend on the unforgettable experiences that makes this country one of the most breathtaking I’ve ever been to!
If you have any other tips, you can share them in the comments below.
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