Reykjavik, and Iceland as a whole, is at the top of everyone’s bucket list. From its jaw-dropping landscapes to its glittering, dancing skies, this Scandinavian country is entirely unique in its culture and is a favourite location among travellers worldwide. However, this compact, snow-capped island is known also for being one of the most expensive to visit.
With $1 equating to roughly 125 Icelandic Króna (ISK), those who aren’t mathematically gifted (like me) will struggle to keep track of how much they’re spending. With a small coffee typically costing anywhere between 600 and 700 ISK ($4.50 to $5.50), it’s easy to see how the little things can start to quickly add up.
So, we’ve thrown together some tips to help fellow travellers get the most out of visiting Iceland’s amazing capital city without breaking the bank!
From the most useful apps to what to pack, this is our guide to exploring Reykjavik, Iceland on a budget.
Look For The Right Accommodation
Although accommodation within the city centre tends to be a little pricier than those on the outskirts, it’s always better to search for something in a good location. When you become reliant on public transport, your cash begins to disappear without you even realising it’s gone.
Staying within walking distance of Reykjavik’s main sights will save you money on taxis and buses, and will also give you a better vantage point from which to explore the city. Luckily, Reykjavik is small enough for this to be easily feasible!
Try also to find accommodation with self-catering facilities, such as a shared kitchen. Use hostelworld.com, Airbnb (save up to $45 using that link to sign up!) or Booking.com to find the best deals – and make sure to use their ‘map’ function, too.
The vibrant, youthful Hlemmur neighbourhood is the perfect spot for anyone wanting to travel outside the city, too; not only is it a 5-minute walk from the city centre, but it is also just around the corner from Reykjavik’s central bus station.
Prioritise The Things You Enjoy Most
Every traveller is different: while some enjoy sampling the local cuisine, others love guided tours or visiting museums. When planning your trip to Iceland, try to budget for the sights and experiences you already know are on your bucket list.
For example, a trip to the Blue Lagoon from the centre of Reykjavik will cost roughly £105 while climbing to the top of the Hallgrímskirkja Cathedral tower is £6.15. By being aware of these expenses before you travel, it will be easier for you to budget for the rest of your time in Iceland.
We all have to eat, but buying three meals a day can really start to add up. When packing for your trip, make sure to bring Tupperware or collapsible plastic containers. That way, you’ll be able to prepare multiple meals in advance and store them for the next day.
For a long coach or bus journeys, it’s also cheaper to bring your own lunch or snacks: a container will prevent them from being squished in your bag.
Bring A Reusable Water Bottle
With so many waterfalls and so little pollution, it is no wonder that Iceland’s water is fresh and pure. Stay hydrated, be environmentally-friendly, and save money on plastic bottles by bringing your own water bottle.
Most public spaces and transport centres will have refill stations, and all tap water is deliciously drinkable. You’ll also blend in perfectly: it’s not unusual to see Reykjavik locals walking down the street with re-useable bottles of their own. Most cafes, restaurants and bars will also refill them for you, too.
Find The Best Budget Supermarket
Upon arriving in Iceland, one of the most useful things to do is hunt down your nearest Bonus market: Iceland’s most famous budget supermarket. With its glinting yellow sign and large, round pig logo, it’s quite hard to miss!
Once you’re there, try stocking up on snacks and fruit (typical Icelandic dishes are often pretty carb-heavy), and other things that won’t go off during your stay. In hostels, fridge space can often be limited, so try to stick to dry foods such as pasta, bread, biscuits, and bananas. Teabags and instant coffee are also useful items to pick up, and will satisfy your caffeine cravings!
Try To Only Eat 1 Meal Out Per Day
Cultures are often best experienced through their food, and Iceland is no exception. With its multitude of harbours and endless stretches of land, their hearty fish and meat dishes are unbeatable.
However, it can be difficult in Reykjavik to find traditional food at a reasonable price. Because of this, I would suggest having breakfast and lunch in your accommodation – or bringing it with you – and venturing out only for dinner.
Icelandic supermarkets have a range of pastries that make the perfect breakfast snack, with sandwich ingredients easy to find and to store. That leaves you plenty of time and cash to enjoy some of Iceland’s infamous lamb stew later on in the day!
Check Out Apps Like Get Your Guide For Deals On Tours And Experiences
When searching for different tours and experiences in Iceland, the information online can be somewhat overwhelming. There seem to be a million different companies offering endless deals; it’s impossible to know whether you’re choosing the right one. However, there are a number of apps which can help you make these decisions, comparing different prices and ratings to curate the perfect list of options for you.
Apps and websites such as Get Your Guide also offer a number of last-minute deals for anyone feeling a little adventurous! Only one day in advance, I used Get Your Guide to find a Northern Lights tour for only £25 (though pricing might depend on the exact tour and the time of year).
For more information, read our complete guide on How To See The Northern Lights In Iceland!
Ask The Locals
The best way to truly get to know a culture? By asking the locals. Often, in tourist-heavy cities such as Reykjavik, the centre of town is swarming with souvenir shops and pricy restaurants, all targeting visitors.
Ask a local, such as those working at your accommodation, for recommendations on food, things to see, and getting around. Not only will you save a little money, but your experience is guaranteed to be more authentic, too.
In Reykjavik, I was recommended a tiny, modern restaurant, aptly named Icelandic Street Food. This small company has a number of locations across the city and offer a range of traditional Icelandic soups and stews – with flavours such as lamb, fish, and shellfish – at extremely reasonable prices, and with free refills. Ask for your soup to be served in a bread bowl for an even more unique experience!
Pack Comfy Walking Shoes
Opting to walk instead of using public transport is one of the best ways to save money while travelling; and in a small, flat city like Reykjavik, it’s also an ideal means of exploring every corner of the town. While Icelandic public transport is efficient and reliable, you never quite know where you may end up if you walk.
Some of Reykjavik’s most picturesque streets – such as the rainbow-striped Skólavörðustígur – are pedestrianised, and the city is extremely pedestrian-friendly. Within 30 minutes, you can wander from Reykjavik’s westerly Old Harbour to Hlemmur Square, on the eastern side of town.
Take your time to stroll, and enjoy the relaxed pace of life that lies at the heart of Icelandic culture: looking north between the low, colourful houses, you’ll be able to take in the breathtaking mountains, too.
Make Use Of The Common Spaces In Your Accommodation
To warm yourself up on a crisp winter day, it seems most logical to duck into the nearest coffee house and wrap your hands around a warm, creamy cappuccino. But doing this three times a day can take a toll on your bank balance! Instead, try to make use of the common areas in your accommodation if you need to relax or warm-up.
For remote workers and freelancers, these areas also make ideal workspaces; the bar within a hostel often offers drinks for a more reasonable price than most bars or cafes, too.
Keep Your Eyes Peeled For Happy Hour Deals
Instead of nursing your expensive beer until it starts to go warm, in an attempt to make it last the whole evening, keep your eyes peeled for signs offering happy hour deals. These bars are also likely to be busier than others, giving you the chance to meet like-minded travellers and friendly locals.
There are also a number of apps to help you track down the perfect bar; download Appy Hour to find out which places are offering the best deals on each evening of your stay. As always, asking locals for their favourite haunts is another sure-fire way to find fun, vibrant bars with inexpensive drinks!
The award for the city’s longest happy hour goes to the bright, vibrant Bravo Bar. Settled neatly into Laugavegur, Reykjavik’s main street, this bar’s cosy yet lively atmosphere make the perfect place to settle in for one of Iceland’s infamously long winter evenings.
5 Best Free Things To See In Reykjavik
The city’s iconic Hallgrímskirkja cathedral is one of the most sought-out monuments for any visitor to Reykjavik. Perched atop the city’s only hill, this unusually-shaped light stone church was constructed in the 20th Century and is equally as impressive inside as outside.
The shape of the cathedral itself seems to echo that of the large pipe organ within the church; its minimalist decoration and bright, curved ceilings are a modern twist on traditional architectural styles.
Whilst entry to the church itself is free of charge, a ticket to climb the tower costs 1000ISK.
Located in the Western-most corner of Reykjavik, the Old Harbour is one of the most picturesque parts of the city and a stark reminder of Iceland’s proximity to the arctic.
Bright, traditional fishing boats bob gently in the port, as larger ships make their way slowly out to sea. Wander around the harbour itself before window-shopping along Grandagarður, whose stores are nestled into repurposed, industrial fish factories.
Harpa Concert Hall
Recognised for its unusual architecture and its glittering panels of coloured glass, the Harpa Concert Hall is one of Reykjavik’s most modern buildings. The interior of this enormous, sleek structure is equally as striking, with wide-open ceilings and huge windows, whose views across the bay and towards the mountains are unbeatable.
Entry into the concert hall is free of charge, with a number of shows and concerts available for various prices.
A short walk from Reykjavik’s city centre lies Tjörnin Lake: a wide expanse of water, framed by quaint, colourful houses. During the winter months, the water freezes over completely, making it a unique place to take a stroll.
Sun Voyager Sculpture
Jetting out into the turquoise bay is the iconic Sun Voyager sculpture, said to represent new discovery and adventure. Paying homage to Iceland’s well-known Viking roots, this piece was commissioned to celebrate Reykjavik’s 200th anniversary.
What To Know For Visiting Iceland
Iceland is part of the European Schengen zone, which typically provides 90 days of free entry every 180 days to visitors from many countries. This means you can enter Iceland and travel between other European countries for up to 90 days per stay.
Be sure to check the EU Schengen website for the latest information for your specific country.
The currency used in Iceland is the Icelandic Króna (ISK). The current exchange rate is approximately 1 USD to 125 ISK. You can check the latest EUR exchange rate on Google.
While traveling, our number one tip is to use a free Charles Schwab Debit Card which gives unlimited worldwide ATM Fee Refunds and the true exchange rate.
Best Tours In Reykjavik
Some of the best tours and things to do in Reykjavik are:
- Blue Lagoon Entry with Roundtrip Transfers
- Golden Circle and Northern Lights Combo
- South of Iceland Full-Day Tour from Reykjavik
Where To Stay In Reykjavik
We recommend booking your hotels on Booking.com to get the best rate and many hotels offer free cancellation in case your plans change.
Some of the best reviewed hotels and accommodation in Reykjavik are:
- Hlemmur Apartments: Luxury furnished apartments on the main Laugavegur street with full kitchen so you can cook your own meals.
- Skuggi Hotel Reykjavík: Modern hotel in central Reykjavik with full breakfast included.
- Midgardur by Center Hotels: Luxury hotel with on-site restaurant walkable to many central attractions.
AirBnB is also a great option in Reykjavik and you can save $45 using our link to sign up!
Best Time To Visit Iceland
The best time to visit Iceland depends on what activities you would like to do. For the Northern Lights, plan to visit between November and April, or to take advantage of the longer summer days for the Blue Lagoon or road trips you can visit between June through August.
For more detail, be sure to read our complete guide on the Best Time To Visit Iceland depending on what you would like to see and do!
Best Books About Iceland
Read more about Iceland before you go! Some of the best books about Iceland are:
- DK Eyewitness Top 10 Iceland (Pocket Travel Guide)
- Lonely Planet Best of Iceland
- Where the Shadows Lie
What Power Adapters Do You Need
You can buy a universal adapter that will work in any country and has extra ports for USB cables to charge your phone and other devices.
We also always travel with a portable battery pack which is great to keep your phone charged on long journies.
Transportation In Iceland
- Public Transportation: Iceland has extensive public transportation primarily by bus. Be sure to check the public bus website for routes and any closures.
- Rental Cars: If you want flexibility, we recommend renting a car at the airport. This provides the easiest way to see certain landmarks. For more information, read our article on Why You Should Rent A Car In Iceland.
- Uber: Uber is not available in Iceland. However, there are metered taxis readily available from taxi stands or the Hreyfill taxi app.
Our top recommended travel insurance companies for Iceland are:
- World Nomads: Comprehensive coverage for medical, travel delays, and electronics.
- SafetyWing: Cheaper monthly coverage primarily for medical, starting at $37 for 4 weeks of coverage.
For more information, read our article on why you need to book travel insurance for your next trip!
More Articles About Iceland
- Everything You Need To Know Before Visiting Iceland’s Blue Lagoon
- When Is The Best Time To Visit Iceland?
- 10 Things You Can’t Miss In Reykjavik, Iceland
- 11 Most Instagrammable Places In Southern Iceland
- 8 Stops Not To Miss On Iceland’s Ring Road
- Road Trip Inspiration: 10 Must-See Places In Southern Iceland
- 9 Reasons You Should Stay At The Silica Hotel, Iceland
- How To See The Northern Lights In Iceland
- Iceland: A 3 Day Itinerary In The Land Of Fire And Ice
- Iceland Road Trip: 5 Epic Hidden Gems To Seek Out
- Why You Should Rent A Car In Iceland
- 7 Ways To Go Off The Beaten Path In Iceland
We hope that this article has helped inspire you to visit Reykjavik on a budget. If you have any questions about the destination or have your own travel tips to share please leave these in the comments below.
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