Iceland is not a cheap country. In fact, it ranks 14th of the 141 most expensive countries in the world according to Business Insider based off the Travel and Tourism Competitiveness Report from the World Economic Forum (article published May 2015).

So how can you holiday in Iceland while not blowing your budget or all the money in your bank account?

Although every option listed below may not work for you, here are a few tips to consider when visiting this Nordic island nation. (Any prices listed are quoted in Canadian dollars)

1. Grocery Stores

Food in restaurants is incredibly expensive with meals usually costing a party of 2 with no drinks at least $50 or more. Consider shopping at grocery stores to offset some of this expense. Two of us ate three days worth of basic but healthy meals on groceries from the Bonus supermarket for $40. Breakfast and lunches are easy meals to make on your own. If you stay in accommodations with access to a kitchen, you can cook in the evenings as well.

2. Cut the Booze

Liquor can be quite pricey in Iceland. Before you leave the airport at Keflavik, there’s an opportunity to buy alcohol at lower prices than in Iceland’s liquor stores. If you enjoy a beer or two in the evening, consider grabbing a six-pack or bottle of wine as you depart and enjoy it in your accommodation after your meal.

3. Travel in Winter

Travelling in winter isn’t for everyone but if you’re looking to travel to Iceland, consider going in their low season. Granted you’re less likely to camp (unless you really love winter camping), car rentals can be as much as 40% cheaper in the colder months. Accommodation is also cheaper (albeit still pricey). You might even be able to bargain with a company if you’re booking a variety of tours or several nights with them. Winter travel also offers a very different perspective of the land of fire and ice.

4. Stay in Hostels, Couchsurf or use Air BnB

I was shocked at the expensive price tag of accommodation in Iceland. Usually I stay at hostels to cut my costs, but a dorm room of 10 people still cost $30 CAN a night (expensive for me as I tend to travel to cheaper destinations). A private double or twin room without bedding or a private bathroom in the same hostel was about $100. Sleeping isn’t cheap. If you usually opt for hotels, consider a few other options such as staying in hostels, using Air Bnb or if you love to meet locals, stay with them for free as a couchsurfer.

5. Camp

Consider camping in the summer season while in Iceland. Iceland Air offers two checked bags of 23kg each so packing a tent and some camping supplies won’t be a problem. Camping is by far the cheapest – and arguably the best way – to experience the dramatic scenery of the country.

6. Use Coupons and Discount Codes

When booking a car to travel Iceland, I found a coupon with SadCars that dropped the price of our 12 day rental by $300. There’s also a coupon book offered by Icelandic Coupons. Depending how you travel, the roughly $25 CAN fee for the booklet can pay itself off quickly. Many places with discounts in the booklet are for restaurants but do include a few tours.

7. Rent a Car

Although renting a car can be expensive, if there is two or more of you traveling together it can be cheaper than day tours. It allows you the freedom to go where you’d like, saves time repeatedly day-tripping out of Reykjavik and cuts the big fees of organized tours. Be aware that some activities do require guides or specialty vehicles with larger tires and 4×4 to get to certain destinations.

8. Take a Shorter Trip

A month in Iceland would be fantastic, but instead I chose to go for 18 days to cut my costs while in the country. Although it’s nice to spend more time in a country I had to be conscious of my budget and booked a trip according to what I could afford. I’d rather spend a little more each day on a shorter trip than feel money-stressed just because I chose to travel for more days.

9. Prioritize your Excursions

There are a lot of cool things to do in Iceland but doing them all would cost thousands of dollars. I made a list of things I wanted to do in a descending order. This helped me realize what was really important and what could wait for another trip or a cheaper destination. Diving the continental divide was a must-do but seeing orca’s in the ocean didn’t rank as high knowing I’d have an opportunity to see them at a later date in Patagonia, South America. You can even consider skipping the famous Blue Lagoon in favour of other geothermal bath sites. There are many to choose from throughout the country that cost considerably less than the Lagoon’s 40€ entrance fee.

10. Take Advantage of Flight Deals and Consider Alternative Airports

We patiently waited on booking our flights and ended up getting them for $140 less (for two of us). Deciding to fly out of a neighbouring city five hours away also saved us collectively $700 even after considering fuel and long-term parking. Our return flight out of Edmonton was $497.

These tips won’t work for everyone’s lifestyle but one or two can save you a surprising amount of money. Also remember, it’s not always worth pinching pennies if it’s something you really want to do or it causes you to stress out. A holiday is meant to be fun so be willing and flexible to spend a little cash sometimes if looking for a particular experience.

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