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Visit Iceland on a Budget – Tips for Reykjavik

Girls Who Travel | Icelandic Street Food

Can you visit Iceland on a budget? Back in September I was coming down off my trip high from 2 months in Europe. I wanted to spend the New Year in a new place. I used my miles and booked a 2 week trip to Reykjavik, Iceland. After the fact a few things hit me.
1) I had just come back from a 2 month trip and had little money.
2)  I had just booked a trip to a notoriously expensive place. But I managed to explore Reykjavik on a budget! Here are a few things we did to try and keep the cost down, and also a few mistakes we made. Because what adventure doesn’t include a few mistakes, right? Read my tips on Icelandic street food and shopping at the Reykjavik flea market!

visit Iceland on a budget

Cash or Credit

First off, don’t bother taking cash to Reykjavik. Even our free tour had a card reader for tips. I was given a weird look when I initially asked for an ATM and asked why I would even need one. If you have a credit card with no international fees, you can save yourself some money by avoiding ATM and currency exchange fees.

Parking in Reykjavik

visit Iceland on a budget

When you visit Iceland on a budget it’s a good idea to rent a car. This is the first trip where I’ve done that. We wanted to have the freedom to move around as much as we wanted and did not want to be constrained to bus tours outside of Reykjavik. Originally, I was going to try and take public transportation. But after reading many other advice sites it sounded like the rental car would be best in the end. If you plan to rent a car, make sure to check if your Reykjavik lodging has parking. Ours didn’t, but we were able to find free parking 6-7 minutes walking distance from downtown. Parking in the residential areas surrounding downtown Reykjavik can save you a lot of money in parking fees, just pay attention to posted signs.

Attempting to Eat Cheap

visit Iceland on a budget

Grocery Stores

The toughest thing for us was finding cheap food. We went to the discount grocery stores, Bonus and Krónon, and stopped by Costco to buy cheap snacks for the road and between meals. Your foreign Costco membership works! We just had to get an override. The food there was probably the cheapest meal we’ve had the entire time in Iceland. We made sure to bring an insulated grocery bag for cold items. The next time I visit Iceland I will make sure to leave time to plan a few go-to recipes for easy meals to avoid most of the expensive restaurants.

Icelandic Street Food and More

For breakfast, I loved Brauð and Company, a great bakery where I’d get pretzels to snack on and cinnamon rolls for breakfast.

When we did eat out, the cheap places we found were mostly Bæjarins Beztu Pylsur and Noodle Station which had great prices for okay  food. A few places had lunch specials that lowered the price of a meal, but they were still $20-30. My favorite place in Reykjavik was Icelandic Street Food. I still spent over $15, but it came with free refills on soup and free dessert of spiced cake and brownies. I felt like I really got my money’s worth. Plus, if there is no seating inside you can take your food to the bar next door to eat and still come back for refills. Eating around Reykjavik on a budget can be tricky, but doable! 

Pro tip when you visit Iceland on a budget: don’t buy bottled water! The tap water is delicious and restaurants will give you as much water as you want for free (plus, it’s more eco-friendly). We brought instant hot chocolate and coffee from home so we wouldn’t buy too many hot drinks. If you’re wanting to sample Icelandic alcohol, however, it is expensive. Despite pictures online Costco does not sell alcohol. Buying alcohol at the duty free store before exiting the airport is the cheapest way to enjoy a drink. If not, you will have to buy individual drinks from restaurants or buy from the Vínbúđin which are both extremely expensive. If you don’t mind spending the money, an espresso martini was labeled “better than sex” by our waiter in Reykjavik.

visit Iceland on a budget

Laugavegur and the Reykjavik Flea Market

In fact, I didn’t find much I wanted to buy in Reykjavik. I typically like locally made stuff for myself and souvenirs. The main shopping street, Laugavegur, had a lot of interesting stores. But I didn’t find anything I was willing to spend money on. On our last day we waited out a weather warning. I convinced our group to head to the indoor flea market, Kolaportið (only open on Saturdays and Sundays). It is called a flea market, but has a mix of second hand and locally made items with a cafe. There we found lots of great booths, which made shopping around Reykjavik on a budget easy. I ended up getting a locally made lopapeysa (Icelandic sweater) for about half the price it would be in the stores around the main shopping area and did 90% of my souvenir shopping. I loved it! Lots of local vendors and artists.
visit Iceland on a budget

Do you have any tips on navigating Reykjavik on a budget? Please share them in the comments!

Click here to listen to Away She Goes, the Her Adventures podcast. On today’s episode: Tips: travel on a budget.

    Hayley Nichols

    During university I tried traveling on breaks whenever I could. Now that I'm graduated I want to fit travel more into my everyday life and share my experiences. My writing focuses on sharing my stories, misadventures, and lessons I've learned from everywhere I visit.

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