By the time our Iceland trip came around we had already been on the road for almost 6 months, living on a budget and still living the dream. We believe we’d gotten quite good at making our money last; but one thing was causing us dread… Iceland.

It is no secret that Iceland is an incredibly expensive destination for tourists, often leaving even the most seasonal of traveler’s wallets dry. It’s ranked as the third most expensive country in the world and we had little faith that we’d be able to stick within our tight budget in a place where even a single meal will set you back almost $50 AUD. Would we even be able to leave the hotel?

Well luckily for us we traveled Iceland with a budget of $650 per person, saw everything we wanted to- and absolutely smashed it! So keep reading to find out how we travelled one of the worlds most expensive countries on a $650 budget.

Free sights

The most fascinating thing about Iceland is that almost all their sights are natural and therefore free to visit. You really do not get this in many other countries, and when you do visit natural sights in most other countries they try to make money off them anyway. $20 to see a waterfall? No thanks. The most we ever paid in Iceland for a natural attraction was $8.

In fact only 2 attractions required us to fork out money.

1. Kerid Crater (entrance fee $4)

2. Seljalandsfoss waterfall ($8 parking)


Total cost per person so far: $6


Car hire

The most vital part of our Iceland trip. Without a car we would have had to book over priced day tours to see the sights which are free to see on your own anyway! I personally would not recommend anyone travel to Iceland without hiring a car.

We hired a Hyundai i10 for 6 nights to drop off and pick up in Reykjavik. The cost of this hire car was only $250. In my opinion an absolute steal, but the real costs come in with the petrol.

Total cost per person so far: $131

Petrol prices

Well.. you win some and you lose some. Petrol prices are always fluctuating so by the time you travel to Iceland you may be in luck. For us we paid $2.50 per litre which is an uncanny amount. However it still worked out cheaper than organising guided day tours and we had the added freedom of having our own car. Over our week in Iceland we spent $400 on fuel.

Total cost per person so far: $331


Accommodation in Iceland is what really shocked me, we decided to stay in a dorm room at a popular hostel because it was all we could afford. However the hostel was nice, quiet (except for our snoring neighbours) and had cheap parking right outside. We stayed at the Kex Hostel in Reykjavík which set us back $520 for 6 nights.

Total cost per person so far: $591



The food in Iceland was next level – I’m talking about a slab of cheese from the supermarket costing $15 – and if you’re thinking about eating out on a tight budget? Don’t even bother. We ate out once in the capital and paid $20 each for a children’s sized fish and chips.

Note: Take out isn’t even an option with a dominos classic pizza costing $20+ and KFC kids meals costing a whopping $17.

We decided to shop at a supermarket called bonus on our first day. Bonus is considered Iceland’s discount store, like Australia’s Aldi. We picked up microwave pasta, chicken schnitzels, bread, steamed veggies, tuna and eggs. Along with a few muesli bars to get us through the day. Conveniently our hostel had a kitchen so we made our own lunches to take in the road and cooked schnitzel, pasta and veggies in the evening.

We spent $90 at bonus which lasted us our entire week long trip, along with one dinner out which cost us $40. Not bad!

Total cost per person so far: $656


You Might Also Like...