19 Tips on How to Save Money in Iceland

Although Iceland might not be the world's most affordable travel destination, there are numerous ways to minimize your travel expenses without reducing the quality of your travel experience. Study up on the following tips and tricks and find out how to have a budget-friendly holiday in Iceland.

1. Buy Your Alcohol in the Duty-Free Store

19 Tips on How to Save Money in Iceland

Alcohol prices are extremely high in Iceland, so the first thing you need to think about when you land in Keflavik Airport is to stock up in the duty-free store.

Each person traveling into the country has an alcohol allowance of 6 units which means that you can, for example, buy a bottle of spirits, a bottle of wine and a six-pack of beer before reaching your limit.

And don't worry, you won't have to knock it all back by yourself in a dark hotel room; consuming alcohol outside is allowed in Iceland so you are always free to drink your beer and wine in Reykjavík's parks when the weather is nice.

2. Don't Shop in 10-11

19 Tips on How to Save Money in Iceland

The most expensive grocery store in Iceland is 10-11. Shopping there will add at least 50% to your grocery bill from the low price stores like Nettó, Bónus, and Krónan, so you must find a way of hardwiring your brain into always equating that hospital-green 10-11 logo with everything that's wrong with the world.

Use self-hypnosis, neuro-linguistic programming, take a picture, call a friend; whatever you do, always remember the first rule of shopping for groceries in Iceland: Never enter a 10-11. 

3. Never Buy Bottled Water

19 Tips on How to Save Money in Iceland

The best drink in Iceland runs free of charge from every faucet, which means that by buying bottled water you are falling victim to one of the worst tourist traps in Iceland.

The quality of Icelandic tap water is remarkable, and you can ask for a free water practically everywhere. You should, therefore, never have to buy water in Iceland unless you are in dire need of a container to fill up for free for the remainder of your holiday. Just let the cold water run, it's the same water that is being bottled.

4. Take Advantage of Happy Hours

With some bars going as far as charging over € 10 for a pint of lukewarm swill, visiting Icelandic pubs can quite quickly eat away your holiday savings. You should, therefore, tread the local way of drinking during happy hours, but most Icelandic bars and restaurants offer discounted beer and wine from as early as 15:00 to as late as 20:00 every day.

19 Tips on How to Save Money in Iceland

Should you have developed a habit that's spinning out of control, you can download an exclusive happy hour app that helps you coordinate during the worst spells and make the most of the precious binge time. 

5. Eat Out at Lunch Time

Eating out is one of the most uneconomical activities you can undertake in Iceland, and it is relatively easy to blow one’s entire travel budget solely on food by frequenting the restaurants. 

19 Tips on How to Save Money in Iceland

If you want to savor the Icelandic cuisine without having your purse for dessert, you should eat out at lunch time when the dish du jour is reasonably priced. 

6. Use the Public Wifi 

Unless you have become so addicted to that black mirror in your pocket that you can't do without an internet connection for a single second of the day, there is no reason for you to stream data through your own provider.

Free public wifi is available almost everywhere in Reykjavík and what is more is that every shop, café, hotel, and restaurant will happily allow you to connect to their wifi without question.   

7. Don't Visit the Blue Lagoon 

19 Tips on How to Save Money in Iceland

Conveniently placed right next to Keflavik International Airport is the Blue Lagoon, which virtually every single tourist who sets foot on Iceland visits at least once. 

Although this is the perfect place to gather strength after a long flight and experience the volcanic energy of the Reykjanes Peninsula, the downside is that it's rather expensive and can often be overrun with people.

If you are travelling on a budget, seeking tranquillity and authenticity, you should visit the Secret Lagoon in the small town of Flúðir instead, or simply go to one of the very moderately priced swimming pools found all over Reykjavík and the countryside. 

8. Hitchhike, Pick up Hitchhikers

19 Tips on How to Save Money in Iceland

Iceland is a hitchhiker's paradise where you can usually summon a ride within minutes of waving the thumb. If you are driving around the country, you should of course always pick up hitchhikers and you could get them to chip in for gas.

Saving money while enjoying the company of a fellow traveller is a win-win recipe that will maintain Iceland's status as the Shangri-la of hitchhiker's, so long as humankind depends on hitchhikable modes of transportation. 

9. Never Use a Taxi Service, Unless Your Life Depends on it

19 Tips on How to Save Money in Iceland

With taxi flag falls starting at around € 5.10, you'll be remarkably quick to realize how easily walkable Reykjavik is.

A short drive from the Central Bus Station to downtown Reykjavík will cost around € 15.50, while it would only take you 15-20 minutes to walk the same distance.

If you plan to travel far from central Reykjavik, you should use the city's affordable and dependable public bus system.  

10. Always Book Well in Advance

19 Tips on How to Save Money in Iceland

Remember always that flights, accommodation, rental cars, and tours are much cheaper if you book well in advance—and what is more is that what you book beforehand will not turn out to be an extra expense that you hadn't taken into account when you planned your budget. 

11. Know Your Bank's "Service Charges"

Much the same as the mafia, your bank's ultimate goal is to make money, and like the mafia, your bank uses a variety of plots and schemes to accomplish this goal.

One of the most common and simplest is called a "foreign transaction fee," which is what the mafia calls "Pizzo," and what the police calls "extortion."

19 Tips on How to Save Money in Iceland

If you use your credit card to make a purchase in a foreign country, the bank will generally charge you a 3% conversion fee which, of course, means that for every $100 purchase, the bank sucks away an extra $3, under the official pretext that "there is a greater potential for fraud with international transactions, so it costs the banks money to protect the consumer."

To avoid your bank's protection rackets, you can either apply for special cards that don't charge for foreign transactions or simply travel with your cash in your pocket.

12. Drink Free Coffee

19 Tips on How to Save Money in Iceland

In most Icelandic banks, thermoses filled with hot free coffee are used to lure in future victims. If you are running an extremely tight ship, you should not shy away from helping yourself to a complimentary cup or two, every day for the duration of your holiday.

And if you mix it up by visiting numerous banks, you will definitely get away with drinking an obscene amount before ever being bothered by a single security guard.

This might not be enough to take down the entire system, but if you're methodical, diligent and brave, you might just go a long way towards winning back that foreign transaction extortion fee. 

You should also remember that wherever you actually pay for a cup of coffee in Iceland, the price almost always includes a refill.

13. Cook Your Own Food

19 Tips on How to Save Money in Iceland

With Icelandic restaurant bills normally giving you that soul-wrenching feeling only a crooked auto mechanic can really replicate, you will do your sense of self-respect a favour by buying your own groceries and cooking your own food.

Make use of the kitchens found in all guesthouses, hostels and campsites in Iceland and your grocery bill for three days will be the price of a single meal in a mediocre restaurant.

You can also book accommodation in Iceland's countryside by booking a local's cabin or cottage, all of which come with a kitchen (and sometimes even your own personal hot tub). The website Bungalo lists Icelandic summer cabins, many of which are surprisingly cheap to rent.

14. Hike Around Reykjavík. 

19 Tips on How to Save Money in Iceland

If you're spending a few days in Reykjavík and have your mind set on experiencing an easy hike in the Icelandic wilderness, but do not have the means to invest in a guided tour, you should consider hiking Esjan, Reykjavík's mountain, or the geothermal valley of Reykjadalur instead.

The Mars-like Rauðhólar (red hills) are also easily accessible by bus, car or bicycle from the city centre. This 5200-year-old cluster of pseudo-craters is a part of Reykjavik's nature reserve Heiðmörk, a popular refuge where locals find peace and stillness in nature's embrace, only a short distance away the from the crowded and bustling streets of the capital.

15. Connect With Locals 

19 Tips on How to Save Money in Iceland

Most Icelanders are compassionate and hospitable people who take very kindly to visitors. According to a recent survey, conducted by the World Economic Forum, Iceland is not only the most peaceful country in the world but also the friendliest.

Helping strangers in dire need of assistance has long been Iceland's unofficial national sport, so don't shy away from striking up a conversation with a total stranger to ask for advice on good deals or cheap things to do. You will almost always be treated with kindness and respect, but you can also plan ahead and connect with locals through our page. 

16. Shop for Memorabilia in Thrift Shops

19 Tips on How to Save Money in Iceland

Sadly, the so-called "Puffin Shops"souvenir boutiques which are only tailored to gullible touristshave in the last few years become one of Reykjavík's distinguishing features.

In these overpriced dens of mass-produced sweatshop crap from China, you will never find anything Icelandic, let alone memorable.  

Should you be looking for authentic, modestly priced Icelandic memorabilia, you would do well to visit the Kolaportið weekend flea market by the old harbor, or the Red Cross thrift shop on the Laugavegur shopping street.

17. Go Camping

19 Tips on How to Save Money in IcelandPhoto credit: Philip Gunkel.

There is neither a cheaper nor better way to spend a summer night in Iceland than in a tent. Camping is a sound way of establishing and preserving your fundamental connection with nature, and nothing in the world comes close to replicating the feeling of waking up to the soft and all-encompassing morning song of the Icelandic wilderness. 

Since almost all Icelandic towns and villages run at least one campsite, you will always find a place to pitch your tent, wherever your adventures may take you. 

18. Use Equipment Rentals

Iceland's rugged landscapes and dynamic weather patterns are known to catch even the most seasoned travelers off guard and knowing how to pack for travel in Iceland will always be essential to ensuring the quality of your travel experience.

But although carrying a few indispensable items in your backpack might make the difference between a good and bad journey, there is no need to make a huge investment in camping equipment should you not already be in possession of the essentials a journey into the Icelandic wilderness demands.

Camping equipment rentals can supply you with everything you need—from hiking shoes and warm layers to tents and mattresses—and save you from spending a large portion of your travel savings on things you might not be using again. 

19. Couchsurf in Iceland

Connecting with Iceland's ever-active Couchsurfing community is not only a fail safe way to save money, but it also allows you to experience a new culture from the inside out.
If you break out of your comfort zone and couch-surf in Iceland, you are sure to see and experience things that aren't mentioned in guide books, try and do things you never thought you would, and understand the true meaning of generosity.