If you’re not careful, a trip to Iceland can get expensive! The Icelandic cost of living is higher than in most of Europe, but it is perfectly possible to explore Iceland on a tighter budget.

The reliance on imported goods makes Iceland an expensive country to live in, and the local people are paid a much higher average salary to compensate for this. However, with a little prior planning and a dash of insider knowledge, you will be overwhelmed with all the free or cheap adventures just waiting to be discovered by the thrifty tourist.  

Read on to plan your affordable trip to Icelandic, packed full of unforgettable adventures.  

1. Public transport 

Buses are surprisingly cheap in Iceland, with more affordable travel tickets than many other European countries. A single fare starts at just 480 ISK (USD 3.50) for an adult, or you can choose to purchase a bus passport for the duration of your stay.

Alternatively, you could hire a car at one of the many car rental outlets at the airport. However, you should bear in mind that the cost of fuel is very high in Iceland, so taking the bus may be the better option for those traveling on a budget.   

You can find out more information about Iceland’s bus service here.   

2. Free Hot Springs   

Armed with your bus passport or hire car keys, it is time to start exploring the land of fire and ice!  

You simply cannot come to Iceland without taking a dip in one of our amazing hot springs. While many tourists flock to the world-famous waters of the Blue Lagoon, there are tonnes of totally free hot springs and thermal rivers that you can enjoy in Iceland.  

Reykjadalur Hot Spring River is one of the best free hot springs to visit in Iceland. It is about a 40-minute drive from Reykjavik, then a 45-minute hike. From waterfalls to mountains, to the extraordinary blue of the thermal waters, this hike is a perfect opportunity to explore Iceland’s outstanding natural beauty on foot.  

The fact that you have to hike to these springs means that they are much less crowded, and you are likely to get chatting to like-minded travelers or friendly locals as you relax in the warm water. Perfect!  

Insider tip: The hot springs of Iceland are heated via the geothermal activity of the earth. In some cases, they are hot enough to burn you severely. While there are many stunning Icelandic hot springs to be enjoyed, it is extremely dangerous to enter a wild hot spring that you do not know to be safe!  

3. Discovering the Great Outdoors 

The best things in life have always been free, and the breath-taking Icelandic scenery is no exception. After your dip in the hot springs, there are still plenty of volcanoes, waterfalls, glaciers, black volcanic beaches, and snow-capped mountains to explore. 

Here are some of the best natural Icelandic attractions that are entirely free to visit: 

Gullfoss Waterfall

Gullfoss or ‘The Golden Falls’ is one of Iceland’s most famous natural attractions. The spectacular glacial waterfall is based in the canyon of the Hvítá river and gives off an unearthly golden glow. When the light catches the spraying water, Gullfoss erupts with tiny rainbows that will take your breath away! 

Geysir

Geysir has been active for over 10,000 years. Periodic explosions send boiling water up to 70 meters in the air! Nearby, Strokkur erupts much more often than Geysir, with water reaching up to 30 meters every few minutes.  

Jökulsárlón Lagoon

Jökulsárlón is a beautiful glacial lake based in Vatnajökull National Park. It is the largest lake in Iceland! It costs nothing to come and admire the spectacular ice formations here, which are available to enjoy all year round!

Seljalandsfoss  

Found in the South of Iceland, Seljalandsfoss is a breath-taking 60-meter waterfall that originates at the volcanic glacier of Eyjafjallajökul. Exploring the hidden waterfall cave and listening to the thundering waters won’t cost you a cent!

Reynisfjara

For an unforgettable beach trip near Vik, just head to the black volcanic sands of Reynisfjara beach. This extraordinary beach is made from lava and has jaw-dropping basalt columns and towering cliffs to be admired for free. 

Skaftafell  

Skaftafell is a part of the enormous Vatnajökull National Park. Easily accessible via Road 1, you can happily enjoy a day hiking the mountain trails, and it will only cost you the sweat on your brow! 

4. Exploring the City Gardens  

After exploring all the wonders of the Icelandic countryside, you can head back into the capital city for a more refined kind of beauty. Reykjavik’s magnificent botanical gardens are entirely free to enter, homing more than 5,000 different species of plants.  

Alternatively, you could head to the sculpture garden of the Einar Jónsson Art Museum to enjoy a lovely stroll and admire some of the artwork on display.  

5. Soaking up the Northern Lights 

The Northern Lights are a breathtaking natural spectacle. They are best enjoyed between October and March. 

They are created when a stream of particles flows out of the sun and interacts with the earth’s atmosphere, causing an eruption of green, pink, orange, and blue to light up the night sky.  

Despite their scientific explanation, the Northern Lights leave people deeply touched by their beauty. They are best viewed away from the light pollution of towns and cities but can be seen near Reykjavik at the pretty Grótta lighthouse or from Laugardalur Park.  

6. Discovering the Museums of Reykjavik  

After a long night enjoying the Aurora, you can head inside for a cozy day in Reykjavik’s very reasonably priced museums. 

Here are some of the most exciting and affordable museums that you can visit on a trip to Iceland: 

The Icelandic Punk Museum

The Icelandic Punk Museum is not to be missed! It celebrates Iceland’s world-famous punk scene from the 1980s and 1990s and costs just 1200 ISK (USD 9) to enter. Based in a disused public bathroom and owned by a true punk rocker who is full of wacky and wonderful stories, this unique museum is worth every cent! You can check up to date information via their Facebook Page.

The Icelandic Phallological Museum

If you thought the Punk museum was unique, just wait until you visit the Phallological Museum. The entrance fee is 2200 ISK (USD 16), or (USD 13) for concessions. Inside the museum, you will find a collection of more than 200 penises or penile parts, coming from a wide range of animals, including human beings. Standing before the penis of a whale so big that it towers above you will be a somewhat bizarre experience, but certainly, one to remember. 

National Gallery

For those who feel a little shocked by the idea of a penis museum, there are plenty of more conventional museums and galleries to be enjoyed in Iceland too! For just 1500 ISK (USD 11), you can buy a combined ticket to The National Gallery of Iceland, the Sigurjón Ólafsson Museum of sculpture, and the home and studio of impressionist painter Ásgrímur Jónsson.

Saga Museum

The Saga Museum is another wonderful museum in Reykjavik, which brings the thrilling history of Iceland to life with wax models depicting the lives of the earliest settlers. A ticket costs 2500 ISK (USD 18) for adults and 1000 ISK (USD 7) for children.

7. Uncovering Icelandic Architecture 

If the weather is good, you can leave the safety of the museums and head out to explore some of Iceland’s architecture on foot. There are several free walking tours of the city that you can join, with wonderful guides that can tell you all about the history and culture of the streets that you are exploring. 

Some unmissable buildings include the glittering music and conference center of Harpa, the extraordinary views from the glass dome of Perlan, and the beautiful church of Hallgrímskirkja. You can pay a small fee at Hallgrímskirkja to go up the tower and enjoy a unique view over downtown Reykjavik.

8. Free Water 

Icelandic tap water is entirely safe to drink. We recommend bringing a reusable water bottle for your trip. You can get refills from water fountains that can be found all over Reykjavik city or even from one of the many rivers you’ll come across on your travels around Iceland.

We hope that you enjoyed this article about exploring Iceland on a budget and look forward to welcoming you to the land of fire and ice!