iceland on budget
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--- the ultimate backpacking travel guide ---

Iceland experiences a soar in popularity among tourists from all around the world. Iceland became a stopover on the way from Europe to North America (WOW airlines) and financially feasible with European low-cost airlines. Therefore, the Golden Circuit may be a bit overcrowded, but as you go further the density of tourist will decrease to a bearable level.
However, Iceland is not a real backpacker destination especially during the high season (unless you hitchhike and bivouac). The most expensive items are transport (car rental) and accommodation. Food was surprisingly not that expensive.

The local currency in Iceland is Icelandic Króna (ISK). The exchange rate in 2019 is 1 USD = 122.555 ISK . But honestly you can leave all the cash in your pocket as you can find the payment terminal in the mountain huts even in the most remote areas.

Average cost per person: 80 USD per day
including car rental + fuel, accommodation (in campsite), food, entrance fees
excluding flight tickets


Check also top things to see in Iceland in our photo journey.


Transport

The main thing you can save money on are the flight tickets. Read our tips how to find cheap flights.
Generally, you have two option in Iceland. Either you rent a car, or you will travel by local buses. We have relatively many crazy people on a bike. But we felt sorry for them especially in strong wind and rain. Moreover, the roads in Iceland are relatively narrow and due to the lava fields, it is not possible to ride in a terrain.
There is plenty of agencies offering guided tours (from day trips to a several days), or you can buy a bus ticket and move from place to place according to your schedule. Buses are running through the inland and in the summer (thanks to midnight sun) there are night buses to the highlights of the Golden Circle, which are favorable when you want to avoid crowds.
Renting a car is a choice which gives you the most freedom within your travel plans. But driving in Iceland is a bit specific due to very changeable weather and checking the website road.is daily is a must (strong wind, floods). Moreover, there is a lot of gravel roads or roads for 4x4 wheel cars only. If you want to drive off-road be sure to rent a car that is allowed in F roads.
In the summer we rented car from the Northern cars. The car was rather old, and the car rental does not have the office in the airport, but they offer a pick-up to their office just few km out of the airport. During our winter stay we chose the Blue Car rental.

Prices example (2019)

  • car rental high season - 8 700 ISK (73 USD) per day
  • car rental low season - 7 600 ISK (64 USD) per day

Accommodation


Campsites are around 2500-3000 ISK (21 - 25 USD) per person . Moreover, you have to pay for a shower. Generally, the equipment of the campsites is rather poor (small kitchen and only few toilets). As the weather is changeable and relatively cool even in the summer, we finally searched for the campsites with a kitchen facility while we found it nice to eat warm food (outside our food got usually cold before we finished it).
Other options are guesthouses, cabins and small cottages. The problem is that they are usually booked out. As normal in the Scandinavian countries the bathroom facilities are usually shared. The price per person per night is approx. 45 usd.

Recommendations:

  • Glymur - Bjarteyjarsandur - One of the best places we have stayed overnight was a small farm near the Glymur waterfall
  • They had a large common area with a cooking facility, but they also served fabulous home lamb for a reasonable price (2500 ISK). Moreover, they have a small hot pool at the beach, where you can relax and watch the fjord panorama.
  • Helgafell cabin - A lovely cabin in the remote part of the landscape with a huge window to watch the lake or in our case the northern lights.

Food

Supermarket Bónus (yellow pig) is you the cheapest option in Iceland. What surprised us was that the opening time is usually from 10 a.m. We had all the possible flavors of the Skyr they offered.
A favorable option is the mix-grills at the petrol stations They usually offer a soup of a day and some basic food for a price of 1800-3000 ISK (15 - 25 USD) It is self-service, and you get local, hot and fresh food. We tried to avoid the burgers, so we tried local lamb, fish and chips and soups.
The best choice for fast and cheap snack on the way is Icelandic pylsur – hot dog served usually with friend onion. The Icelandic mustard has a sweet flavor than we are used to, but we liked it.

Attractions

Luckily most of the natural attractions are free of charge.

What was worth paying:

  • Volcano Exposition in Hella - interactive and very informative and we spent over an hour there.
  • Barnasfjorn museum of the shark -although the exhibition itself is in one large room, the following video and explanation from the guide made the visit packed with information and full of local tradition life stories. You can touch shark´s skin and the most important of all – to taste a fermented shark.
  • Excursion to the Landmannalaugar -we did not have a SUV nor 4x4 wheel car, therefore we bought a day return ticket to Landmannalaugar. The drive itself was amazing and we could enjoy all the colors of the Brennisteinsalda, green hills and steaming landscape.


Our top places:

  • Fimmvörðuháls hike - We made only a day trek to the Fimmvörðuháls hut from Skogafoss and we found it as one of the best walks ever (and regretted we could not hike all the route to Porsmork). As you follow the river stream you come across a plenty of waterfalls and riffles. On the way up the stream you look at the volcano peak and approach glacier, on the way back you are returning and watching the sea.
  • Falljökul Glacier - we did not want to pay for a guided tour on a glacier (for time and money constraints). On the map we found an ice-tongue of the Vatnajökull that is almost touching the Ring road. From the parking we reached the glacier moraine and glacier within the 10-minute walk. We climbed up the moraine and stepped on the glacier and took a picture. When we were leaving there was a bus of tourist a guide coming.

TIPS

    Hot pools in Iceland – all the big secrets and so on.... There is number of thermal pools which are free of charge, often called secret pools, best kept secrets, etc. All these free natural hot springs has a sign with a warning, that the water is not treated and therefore may cause skin problems or rashes. However, this does not discourage people (including us)
  • Landmannalaugar - this is a pool with running river/stream, which makes the water relatively clear. However, from time to time there is a cluster of algae passing over you. There is a small wooden platform where you can change your clothes and leave your stuff.
  • The secret pool (near Skógar)- hidden just around the corner from the Skogafoss it was the biggest disappointment. The water was green and only lukewarm. There is a battered building where you can change and leave clothes.
  • Laudbrotalaug (the small pool in Snæfellsnes peninsula)- this place was a pleasant surprise. The place was not extremely hard to find, and the water was clear and lovely warm, and the view of the Snæfellsnesjokul is awesome. However, the pool itself is small (best for on, tight for 2), and you will have just tens of minutes before another pool seekers come.
  • Hveragerdi thermal river -after a 40 minutes' walk, you will finally reach the hot river. We walked the distance in the rain, so the walk was that not pleasant, however, the steam of hot water was much more obvious in this weather. The river banks are equipped with a wooden platform for your clothes. The upper the stream you walk the hotter the water is.

Map Attractions on the map

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