How to Save Money While Vacationing in Iceland

Greg and I always try to get the most bang for our buck when we travel. We’re willing to make some sacrifices to save money while still ensuring we experience all the things that matter to us. We plan many of our trips with the mindset that we might never visit that destination again; there are just so many places in the world to see!

For this trip to Iceland we didn’t set a particular budget per se, but we did a rough estimate on what we could expect to spend for our 11-night vacation (12 nights if you count the first travel day and overnight flight). Based on that estimate, which already factored in one person using miles for their flight (see below), our goal was to spend less than $4,000 total. Note that I’m not including costs related to our New York City excursion in this post, as it has no bearing on the Iceland numbers as a whole.

Airfare $1,134.50

Greg used 60,000 Delta SkyMiles (plus $52 taxes & fees) and I paid the lowest available fare of $1082, both for a round-trip coach ticket on Delta. We were initially not traveling together except for the JFK-KEF and KEF-JFK flights due to Greg’s mileage awards flights being less optimal, i.e. requiring a total of three flights each way instead of two. However, after we booked our flights in mid-April 2015, Delta altered the schedules of some domestic flights, including Greg’s LAX-JFK leg. The new flight time would have caused him to have too tight of a connection in New York, so they automatically rebooked him onto a different flight. Even though we had purchased our tickets separately, I had already called and linked our passenger records together. Unfortunately, a Delta representative mistakenly altered my ticket as well, even though it was not affected by the schedule change. I caught the error and called Skymiles customer service and ultimately convinced them to not only return my ticket to the original booking (rightfully so) but also to reissue Greg’s tickets, in both directions, to match mine. I also made the case for giving us exit row seats due to Greg’s height.

On a side note, since this post is about saving money, the only way I could have flown cheaper (on a confirmed ticket, not standby) was on Icelandair’s new nonstop from PDX. However it only operates a few days each week, and Greg & I could not get the schedules to match up to Delta’s lowest mileage awards itinerary. In the end, the difference in price for my ticket on Delta versus Icelandair was less than $180 round-trip.

Ground Transportation $552.99

PDX - Our landlord offered to take us to the airport early in the morning on September 2nd. We took Trimet home on September 14th. Total cost = $5.00.

KEF - We took the airport bus service, called Flybus, to & from the main bus terminal in Reykjavik. The total round-trip cost for two people when booked online was $54.19. We also could have taken the local bus for 1600 ISK ($12.27) per person each way, but the minimal savings was not worth the additional hassle factor.

We spent the first two days walking around the capital. While there is a local bus service, we had no problem walking approximately 5+ miles per day, even in the rain.

We chose to rent the cheapest economy car from Sixt. The nine day rental of a manual transmission Chevy Spark with unlimited kilometers cost us $296.61. We declined insurance as our primary credit card covers it. While the small car limited our ability to travel on F-roads, a four-wheel-drive vehicle would have doubled the rental price, so we made sure our itinerary did not include any forbidden mountain roads.

We drove a total of 2,241 km (1,392 miles). Fuel cost us $189.33.

We never had to pay for parking. At the end of the trip, we did choose to shave more than 30 minutes off our return journey from the Snæfellsnes Peninsula to Reykjavik and paid the 1,000 ISK toll ($7.78) to traverse the Hvalfjörður Tunnel.

Cheaper options: There is a local bus that serves most of the island, but the schedule was intermittent at best and we would have needed a lot more flexibility as well as time to see everything. We were amazed to encounter a fair number of hitchhikers and bicyclists considering the weather conditions, plus with so few cars on the road, it seemed like the hitchhikers were spending a lot of time waiting for a ride.

Lodging $960.49

Greg and I are accustomed to staying in hostels to save money when we travel, and this trip was no different. We ended up staying in a combination of hostels and guesthouses, where we always had a private room, shared bath, access to a kitchen, and free wifi.

We always booked the cheapest lodging option, excluding dorm rooms. In many places the only budget option was the HI. The next cheapest hotel was at least $50 if not $100 more per night and then we wouldn’t have had access to kitchen facilities.

It was worth it for us to purchase an Hostelling International membership ($23 per person), which is good for an entire year at all HI’s worldwide, and lowered our nightly costs by at least $5 per person. Even so, our average cost per night for lodging was still $83.

Camping would have been cheaper but we don’t own any equipment so would have had to rent, we wouldn’t have had kitchen access, and the weather wasn’t exactly conducive to sleeping outdoors.

Food & Drink $434.42

While trying local foods and drinks can be an enjoyable part of any vacation, it can also blow your budget. Restaurants in Iceland are notoriously expensive (consider that they have to import most of the ingredients); even a meal at a gas station cafe costs upwards of $15 per person. Thus we knew we would be cooking most of our own meals.

We actually brought some grocery staples with us from the U.S. like granola bars, a jar of peanut butter, dried pasta, and packaged oatmeal. In hindsight this wasn’t necessary as the Bónus stores in particular had plenty of budget options. For the first few days of the trip I cooked a hot breakfast every morning (bacon, eggs, toast, etc.). But that quickly became a tiring chore so we switched to a more European style breakfast of cold sliced meat, cheese, bread, fresh fruit, and yogurt or oatmeal. For lunch we almost always had peanut butter and jelly sandwiches and then snacked on pretzels, fruit, trail mix, or whatever we needed to tide us over until dinner. Most nights I cooked a hot dinner, including pasta, Thai-style curry with rice, and fish cakes. A couple of nights we purchased microwavable entrees from the store. We spent $146 total on groceries.

We made a few exceptions to our “no dining out” plan. After several days in a row of eating PB&J’s for lunch, especially on cold and rainy days, we would crave something hot and comforting. The lamb soup at Gullfoss Cafe was one such treat. We ended up eating out for only five meals and spent a total of $126.

Now we get to the real budget-breaker: alcohol. Our research had warned us about the high cost of beverages; you can even check prices for yourself online in advance. So we already knew it was worth it to stock up at duty free when we landed at Keflavík. We loaded up with seven 6-packs of craft beer plus one 500 ml bottle of Brennivín for a total of $95.65.

It was tough for these two beer-lovers not to indulge our taste buds at the local bars, but the high prices scared us away for the most part. We ended up sharing one beer ($10) at Skúli Craft Bar in Reykjavik at the beginning of the trip and a taster tray ($22) at MicroBar at the end. Occasionally we would buy a specialty beer at the vínbúðin (total $35.07). On our outbound departure we purchased some duty free liquor to bring home, but that doesn’t count towards trip costs as we didn’t consume any of it until we returned to Portland. We also didn’t drink all of the beer we originally purchased, so quite a few bottles came home with us as did the half-full bottle of Brennivín (but the entire cost of those items is included here).

Miscellaneous $175.84

Travel insurance - The key to determining what to insure is to assess your up-front expenses and what you would forfeit if you didn’t get to take the trip or had to stop the trip mid-way through. Our credit cards covered some advance purchases (like my plane ticket), but purchasing travel insurance was the safest bet for emergency medical and dental coverage, plus trip cancellation or interruption. Our regular medical insurance did not provide any coverage while traveling overseas, so we had to consider that as well. Total cost for two people = $76.

We decided to purchase an Iceland road atlas ($24) from the local map store in Reykjavik. While I had mapped out our itinerary before we left the U.S., including printing detailed (turn-by-turn) navigation instructions for each day, we knew we would not be able to use the GPS on our iPhones as we had disabled the service so as not to accidentally incur any charges while we were out of the country. A good road atlas seemed like the next best option. We also purchased the new edition of Lonely Planet Iceland and DK Eyewitness Travel Guide: Top 10 Iceland. All of these books are now for sale, so please send me a message if you’d like to purchase them.

Entry fees - If you’ve read my previous posts you already know we rarely went anywhere that charged admission. Most natural sites in Iceland do not charge a fee, including waterfalls, national parks, nature preserves, and more. We decided to skip the attractions that did have a fee, like most museums, because we both read a lot about the history and culture of Iceland in advance of the trip and, honestly, we’ve been to so many museums all over the world that it has to be pretty intriguing for us to pay a lot of money to visit another one. A few exceptions were Kerið crater ($5.40 for two people) and the shark museum ($7.78 for one person).

We did have to pay for use of the toilets at a few sites like Þingvellir National Park ($4.66 for entire trip).

There are tons of fun activities to try in Iceland: glacier hiking, exploring lava tubes, horse riding, whale watching, volcano tours by super jeep, and much more, all of which will cost you close to $100 per person if not more. Perhaps if the weather had been better Greg and I might have gone horse riding, something we have previously enjoyed while traveling. But, as it was, our biggest must-do was visiting a geothermal spa. We chose Mývatn Nature Baths ($49.59 for two people) partly due to the location but also because it was cheaper than the Blue Lagoon.

Laundry - We packed well and only had to wash our clothes twice. We paid almost $7 to wash one load of clothes at the hostel in Hofn (had to hang dry), but were allowed to used the washer and dryer at the guesthouse in Akureyri for free.

Total Trip Cost $3,258.24

In the end, we spent almost 20% less than our projected cost of $4,000. That comes out to $1,629.12 per person or $135.76 per person per day. Considering that a 9-night guided tour with a comparable itinerary costs $2,970 per person excluding airfare and meals except breakfast, then you can easily see that if you’re willing to do the work yourself then you reduce your costs significantly.

Greg and I feel like we got to see and do everything we wanted without sacrificing too much just to save money. If I had been willing to spend more, I probably would have booked an excursion like exploring a lava tube. While better weather would have been nice, overall it wouldn't have changed our activities, except maybe we would have done more hiking.

No matter how much money you choose to spend, Iceland is well worth a visit!