Tips for travelling to Iceland on a budget

Iceland and expensive are two terms that are practically synonymous to any modern-day traveller. Despite this, the land of fire and ice is drawing more and more tourists to explore its untouched beauty every year, and there’s a reason why so many people are prepared to break the budget to visit. We just arrived back from our five-day trip based in Reykjavik, and while it still wasn’t cheap here’s how we went about visiting Iceland on a budget.

The hostel situation

While not glamorous, staying in a hostel is an amazing way to travel cheap and make some fantastic friends along the way. We stayed at Loft Hi Hostel, which was definitely up there with one of the best we’ve ever stayed in. You couldn’t get more central, with the location being right on the main shopping and entertainment strip and walking distance to loads of attractions. The rooms were really clean and the hostel bar had a beautiful rooftop area where you could grab a glass of wine and watch the sunset over Reykjavik. The staff were wonderfully helpful and organised free events nightly in the bar where we met some amazing people. They even have a signup sheet for people who’ve hired a car and are looking to bring along extra people with them to split the cost of petrol (which is phenomenally expensive in Iceland).

Touring around

We checked out a couple of tour companies while we were there, but our favourite was Iceland Arctic Adventure. We found the tour groups to be a little smaller which made for a more intimate experience, and the tour guides chatty and full of fun stories. We did the glacier hike tour that left from Reykjavik, that also stopped at the black sand beach and a couple of waterfalls along the way. It cost about £120 or $220 AUD, however the tour went for about 10 hours and included all the hiring costs of your crampons, helmet and ice pick, as well as accommodation pickup. We were on the ice for about an hour as we’d been recommended to try a shorter hike the first time in case we got really cold, however we loved it so much we can’t wait to go back one day and do a longer one!

Hunting for the Northern Lights

You don’t have to be a local to know that the Northern Lights can be a fickle sight to see, wholly unpredictable but absolutely incredible if you do manage to see them. The best time of year to see the Northern Lights is between February and March and October and November as there’s far less daylight and clearer skies.

We booked a tour package through Gray Line that included a Northern Lights hunting trip, but on its own it costs around £29 or $54 AUD. They drove us out to Þingvellir National Park around 9pm, where we all huddled together in a field, stargazing for about an hour before we finally saw the Northern Lights. Though we couldn’t feel our hands and feet by the time we got back on the bus (it is bloody cold sitting around in minus weather at night, double layer all your thermals and socks!) we both agree it was 100% worth it. While you can’t predict whether you’ll be able to see the Northern Lights, the guides have a pretty good idea by about 5pm if the weather is suitable and will cancel by then if not. If your tour is cancelled, or if you go out and don’t see any, you can keep booking your tour each night for the rest of your trip until you see them.

If you’re running super low on cash or if you’ve already seen them on a tour and want to try your luck again, you can walk about an hour to Grotta Lighthouse from downtown Reykjavik or catch the public bus for thirty minutes. Here is a fantastic spot to see the Northern Lights from Reykjavik, plus it’s pretty peaceful sitting on the black sand dunes and watching the waves roll in.

Dining in and out

Iceland has some amazing seafood up for grabs, and you don’t have to spend an arm and a leg to enjoy it. Lobster soup or humarsupa is one of Iceland’s most famous dishes, full of chunky bits of lobster and vegetables in a creamy tomato broth. The Sea Baron (Sægreifann) by the harbour does an amazing cup for around £9 or $17 AUD, and it comes with half a baguette, butter and complimentary self-serve coffee.

If you want to treat yourself to a proper Iceland meal one evening, head to The Icelandic Bar (Íslenski Barinn) where you can dine on everything from smoked salmon and lamb to horse meat and fermented shark. Our pick is the fish of the day, caught fresh and served with an everchanging accompaniment of sides. At £18 or $35 AUD it’s a little pricier, but for the quality it’s worth the dosh.

We couldn’t talk about food in Reykjavik without bringing up the famous hotdog stand. Pop Bæjarins Beztu Pylsur into Google Maps and it’ll take you to a tiny stand with a giant line out the front, selling hotdogs with the lot for a measly £3 or $6AUD. The name roughly translates to ‘Best hotdogs in town’, and we wholly agree with that. Coming with raw onions, crispy fried onions, ketchup, sweet brown mustard and remoulade inside a steamed bun with a sausage, we dare you to find a better hotdog on this planet.

While we love exploring other culture’s cuisines, eating out for every meal really does add up quite quickly. We aimed to eat out and enjoy ourselves for one meal of the day, and instead bought snacks and meals to prepare in the hostel from one of the many supermarkets dotted around Reykjavik. If you live in central London the pricing of supermarket food is pretty similar, however if you’re from Australia you might be in for a bit of a shock. To give you a little idea of the pricing, a bag of standard, run-of-the-mill supermarket granola costs around £5, or about $9AUD.

Drinking tips

Having heard that Iceland doesn’t have a huge drinking culture due to prohibition being lifted only in 1989, we hadn’t set aside a lot of time to explore the nightlife in Reykjavik. This is something we will definitely do when we make our way back, as downtown Reykjavik on a Saturday night was absolutely insane. Drinking isn’t cheap in Iceland, with the cheapest glass of wine on the menu costing around £8 or $14 AUD. A lot of places do happy hour so keep an eye out for that early on in the evening, and later we’d highly recommend making a stop past Pablo Discobar.

Note: One of the most recommended and affordable ways to see Iceland is by car, but Mel hasn’t driven in five years and Kristen hasn’t ever driven in icy conditions and can’t drive a manual. If you’re equipped to try driving around Iceland it’s a very popular way to see the best of what the country has to offer, but since we didn’t opt for this we haven’t chatted about it above. If you are driving and plan on hunting for the Northern Lights, be careful, as half of Iceland’s car crashes last year were from inexperienced tourists on the roads.

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