There is a huge misconception when it comes to Iceland. People always say, “oh Iceland is so expensive”, but it isn’t. Iceland was at the top of my travel list, and for us, it was one of the cheaper trips we wanted to plan at the time. I made a tentative budget for $1500, and when we started booking things that dropped to $1200. When all was said and done, we only spent about $960 each (Adam and I).
Keep in mind that our group was 5 people, so we split every major cost (Airbnb, Car Rental, Gas) 5 ways. This made it more affordable than if you travel solo or with 1 other person. We spent more on our Airbnb and rental car because we had more people, but it is cheaper to split those costs than to pay for it all alone.
It can never hurt to overestimate the budget, and it’s never a bad thing to come in under budget. So here is how we budgeted for Iceland, and what we spent.
Budget Break Down
Here is how I budgeted the trip and what we ended up spending. I have all of the budget items in the order that they come up along the trip from purchasing your flight months in advance to splitting the total cost of gas at the end of the trip. Budget: $1180 Actual : $960
1. Flight
Budget: $400
Actual : $395
We booked our flight about 2 months in advance. This is kind of late and we planned the entire trip later than I originally intended. We could have found a much better price if we had decided on dates earlier, but it was still a decent rate for the flight. We flew out of Toronto which is a major airport, and we traveled on Iceland Air. Iceland Air is known for being a “budget” airline. Though it was a cheap flight, the experience was awesome, and I would fly them again.
2. Airbnb
Budget: $100
Actual : $112
After booking our flight, we found our Airbnb not too long after that. Iceland hotels are super expensive, but with Airbnb you can find something within any budget anywhere in the world. We opted into getting a bit nicer of an Airbnb, a cabin in the middle of nowhere with a hot tub. This put us slightly over our initial Airbnb budget. The extra $12 was worth it to sit in a hot tub at midnight under the stars. Before splitting the cost, the Airbnb total was $561.77. This was a bit of a splurge part of the budget, and was still very affordable. If you broke it down it would be a bit less than $40 per person per night.
One thing to note specifically for Iceland is that the weather conditions can get really bad in the winter months. We knew that traveling in November there was a chance for snow, and we still chose to book a place that was hard to get to. We were lucky to not get snow because the road that our Airbnb was on was gravel and super steep. It would not be a good choice for a place to stay in the winter.
We did get to see the Northern Lights from our Airbnb though which was amazing!
Here’s the link to the place we stayed:Icelandic Summerhouse
3. Rental Car (Including a Wifi HotSpot)
Budget: $100
Actual : $96
Now, if you are visiting Iceland, I highly suggest renting a car. Otherwise you will have to do a tour everyday or go on a tour group where transportation in provided.
Make sure you get a car with all wheel drive! Especially in the winter or colder months with unpredictable weather. The roads can be rough off of the Ring Road and hard to navigate in a regular car.
We rented a small SUV with all wheel drive, and it still was a bit sketchy on some gravel back roads!
We rented through Hertz which probably isn’t the cheapest (Usually I would suggest renting through Turo - like Airbnb but for cars- if you can!), but we booked pretty close to our trip so the Turo options weren’t any better than a rental agency.
In addition to our car, we added on a Wi-fi hotspot for $10 a day, which was 1000% worth it. You need GPS in Iceland and having the hot-spot to be able to make your way around and find restaurants made the trip so easy! Our overall booking for the car and the hotspot was $484.89 split 5 ways.
4. Parking at Airport in Toronto and Gas to Toronto
Budget: $50
Actual : $28 ( 22 for Parking, 6 for gas)
This may or may not be a category for you depending on where you live. If you live close to a major airport then you save that much more money. The Toronto airport is about 2.5 hours from our house which roundtrip is about a tank of gas for my car. We also chose to park in the closest parking lot to the terminal in a covered garage. There’s cheaper parking in lots that aren’t covered or lots that aren’t owned by the airport. Our total parking fee was $107.23 and gas was about $30.
5. Food
Budget: $200
Actual : $156
Food is one of those things that is super easy to save money on and can be a small budget or a large budget depending on how you like to take your trip and spend your money. For this trip, I did 5 days (including our 1st day of travel not yet in Iceland) multiplied by $40 daily budget for food to get to $200. That is a huge food budget compared to most of my trips, but I figured that we would want to eat out and food in Iceland is a bit higher priced. Specifically alcohol was marked up a lot, and I include alcohol in the food budget. But we ate out 3 of the 5 days at sit down restaurants and still came in under budget by almost $50.
6. Experiences and Gifts
Budget: $250
Actual : $133
The best part about Iceland is that most of the amazing things to see are free! Out of everything we did, scroll down to see what we were able to do in that time, only The Blue Lagoon and The Secret Lagoon charged admission. And we paid $4 to see the Kerid Crater. That’s it! We were fortunate enough not to pay the $12 parking fee at Seljalandsfoss, see that blog here for more details. But that was all of the money we spent on experiences! $98 for The Blue Lagoon and $25 for The Secret Lagoon. We only bought some Icelandic Chocolate to take home as gifts for family which was less than $10. We aren’t big shoppers when we travel.
It should be taken into account that if you aren't renting a car, day-trip excursions can be very expensive! We wanted to do an Ice Cave Tour, but it would have been over $100 more that we didn't want to spend. You can always save big budget experiences for next time!
Decide how you would like to spend your money on a trip and be intentional about saving for that trip. If you want to go to Iceland, or anywhere else, budget it out. If you save $100 a month you could go to Iceland in a year. If you save $200 a month you could go to Iceland in 6 months. Set achievable savings goals for whatever trip you want to take. Yes, bills need to be paid and everyone has financial responsibilities, but you can still afford an amazing trip if you want it bad enough.
What We Did in 4 Days in Iceland
Videos from our Iceland Trip:
Day 1 - The Golden Circle
Highlights of our first day were Reykjavik City, Kerid Crater, Geysir, and Gullfoss Waterfall.
You can get more details about our Day 1 in my blog Iceland’s Golden Circle Top 5 Attractions.
