Iceland is becoming quite popular, and this small island nation has adapted to serve more tourists each year. But, it can still be quite pricy to visit, especially for Americans who may be used to low fuel prices and cheap fast food. We visited in the summer of 2017 when AirBnBs were available on family farms and hotels were hard to come by.

If we were to go back to Iceland now, we might consider camping to save money. Back then, we only wanted to pack one bag each since we were flying on to France (with very different weather and expectations for attire), so we stayed in places with showers and beds. :)

All prices below are for two adults.

Activities and Tours

This is where we spent the most money per day in Iceland because we truly valued the opportunity to see beautiful natural places up close and personal. That being said, we still feel this is a modest budget.

Blue Lagoon: $160

We spent two hours at the Blue Lagoon. This price includes access to towels, showers, and a face mask. You can read all about whether or not the Blue Lagoon is worth the money here. Then, make up your own mind before your visit to Iceland!

Waterfalls and Black Sand Beaches: Free

You can visit beautiful viewpoints, black sand beaches and three waterfalls for less than the cost of a bottle of water. We only paid a small parking/ entrance fee at Seljalandsfoss waterfall.

We recommend seeing Skogafoss, Seljalandsfoss, the beaches near Vik, and Diamond Beach. These are all in Southern Iceland, off the Ring Road, and we describe them in detail here.

Diamond Beach, Iceland

Highland Hike and Natural Hot Springs- $175

We enjoyed a full day tour, Landmannalaugar Adventure - A Day Tour to the Highlands with Arctic Adventures.

This included pick up, driving into the highlands, a guided hike, and free time to explore a natural hot spring. Since we did not rent a 4 X 4 vehicle, we found this tour to be the best money for our dollar, and it allowed us to experience a new part of Iceland without doubling our rental car costs.

Here's a detailed post about our day trip.

Geothermal Activity in the Highlands of Iceland

Glacier Hike and Boating on a Glacier Lagoon: $320

This was our most expensive day, but it was a full day of great adventures. This cost includes outfits for our glacier hike, transportation, a guided hike on the ice, and then gear a zodiac boat tour on a glacier lagoon. You can read (and see) more about our tour here.

Fjallsárlón glacier lagoon

Vatnajökull Glacier hike

Vatnshellir Cave Tour $56

If you visit the Snaelfelness peninsula in West Iceland, there is a small, unassuming and inexpensive lava cave tour across from some beautiful beach front hiking. Lava tubes are common throughout Iceland, and the Vatnshellir Cave Tour is one of the smaller and more affordable adventures. We also were able to just walk up and book a ticket, no reserving ahead of time was necessary (although you can book ahead, we chose to spend our day just driving around and going at our own pace).

Exploring lava tubes in Iceland

Accommodations: $954

Disclosure: We take part in Airbnb's associate programs which allows us to earn a small commission when you book through any links below. We would never recommend a location that we did not enjoy, and we appreciate any support our future travels by sharing our experiences.

For 6 nights, we spent $954

This averages out to $159/ night which is more than we usually like to spend, but for many of our stays, we focused on finding places with kitchens so we could save money on food, which is also pricy in Iceland. We booked all our of stays through Airbnb and Booking.com.

You could save a lot of money by camping in Iceland, May-August is the high season for camping.

Here are two of the places we stayed.

Hrútafell Guesthouse by Eyjafjallajökull:
- A perfect spot to sleep in Southern Iceland after checking out famous waterfalls and black sand beaches nearby. Approximately 35 minutes west of Vik. These rooms are in a new building on a family farm right next to Route 1 (the Ring Road). Our room had two comfortable twin beds, and was on the lower level next to the shared kitchen and shared bathroom.
- Berg Horse Farm:
  - Far out on the Snaelfellsnes peninsula near Kirkjufell we found this lovely cabin. This is a wonderful spot for a couple or a small family, and there are multiple cabins next to each other if you are traveling with a group. The cozy living room and kitchen provided us with all the space and privacy we needed, and we had a beautiful view of the water to watch the sunset dip down over the horizon.

A view of Kirkjufell from our Airbnb

Rental Car: $861

Cost: $861/ £775 for 7 days

We rented a basic sedan from Blue Car Rental at Keflavik airport.

We had a great experience with this company and would use them again. (Someone hit the car and took off our side mirror in Reykjavik, so we had to pay for repairs, but surprisingly, the repairs were less than they estimated, so they sent us a refund a couple weeks after we were home! How often does that happen?)

Note: If you want to go on F roads, you will need a 4 x 4 vehicle.

Gas/ Fuel /Tolls: $300

Gas is fairly expensive in Iceland, especially if you're an American who is used to gas being under $3/ gallon. As of June 1, 2020, gas prices were reported to be:

$1.54/ liter and $5.85/ gallon

Tolls do not exist on most of the ring road in Southern Iceland, nor on the F-roads, but they do exist if you are crossing major bridges. (Like on the way to the Snaelfellsnes peninsula).

We did a lot of driving on our road trip, and we discovered that gas stations are few and far between, so every time you see one, fill her up.

Groceries and Food in Iceland: $500

In order to save money, we only ate out at two formal, sit-down restaurants on our 7 day trip and went without coffee most days. We did, however, purchase lunches from local stands and food trucks when it was convenient. (You have to buy a hot dog from a stand when you're in Iceland, it's a rule!)

We shopped at Bonus twice on our journey and ate a lot of PB & J for breakfast.

Food truck at Skaftafell National Park

Have you been to Iceland or want to go? Tell us what's on your list!

7 days in Iceland: Budget