Five Ways to Save Money When Traveling in Iceland

Iceland is one of Europe’s newly-very-popular tourist destinations. Between airfare deals from their biggest airline, a recent addition as an EasyJet destination, and huge festivals like Iceland Airwaves drawing in foreigners by the thousands, there’s been a steady increase in backpackers and budget travelers visiting this beautiful volcanic rock.

As I embark today on a 2-month trip to Iceland (my third visit in two years…I think I might be kind of addicted), I’m again thinking about ways i can keep to my budget and save money in this rather expensive country. Here are a few of the easiest ways to save some serious kronur, and make the most of your time in this amazing place.

1// Go in the off-season.

It is unbelievably cheap to get flights to Iceland in the off-season. Not to mention the savings on accommodations, tours, and not dealing with summer crowds at popular sights. I live in Seattle, and a return flight to Iceland in October is about $650, versus about $1000 in the summer. “But isn’t it colder in the off-season?” you might ask. Yes! You’re going to a country with the word “Ice” in its name…it’s going to be cold in the fall and winter, so be prepared! In all honesty, the weather’s not toooooo bad, and you’ll forget the cold the minute you encounter the unbelievably beautiful Aurora Borealis, or “northern lights,” visible between October and March. They were active 9 of the 13 nights I was there last October, and it was well-worth spending a fair amount of time out in the cold to gaze at the dancing green sky.

2// Buy duty-free liquor.

If you plan on doing some drinking while you’re in Iceland (Reykjavík’s nightlife is not to be missed), plan on buying liquor from the duty-free store at the Keflavík airport. Duty-free liquor is about half the price of buying liquor at the state-run stores in town. If you buy beer in town, be sure to get it at the government liquor stores, and not at convenience stores. Convenience store beer has a very, very low alcohol percentage, and is not even worth buying at all. Party on, dudes!

3// Buy your wool goods at the flea market.

When visiting Iceland, beautiful, hand-knit goods are very plentiful. Though you will see a lot of lovely hats, scarves, and gloves, the most famous knitted wares are lopapeysur, the distinctively-patterned sweaters that are sported by many Icelanders, especially in the chillier seasons. These sweaters are incredibly warm, practical, and can also make for a really fantastic souvenir. Unfortunately, if you don’t have an Icelandic grandmother (or grandfather, Icelandic men love to knit!) to lovingly knit one for you, they can be quite expensive. In many shops, a lopapeysa can run upwards of 20,000 kronur (or just under $200 USD). Thankfully, there’s a great way to buy one of these woolen beauties without breaking the bank. Every weekend in Reykjavík there’s a flea market called Kolaportið in a warehouse near the harbor. Here you can find jewelry, used records, clothes, fish (including the infamous fermented shark dish Hákarl), and tons of knitted goods. There are dozens of stands selling lopapeysur, so be sure to explore them all before you make your decision. My friend got a gorgeous button-down sweater for about 14,500 kronur, which is about $130 USD, a steal for a hand-knit sweater! Be sure to bring cash, most booths don’t accept credit cards.

4// Don’t take taxis.

Taxis are very expensive in Reykjavík, so try not to take them if you can avoid it. The city is very walkable, and unbelievably safe. As long as you have the right jacket (and hat, scarf, gloves, depending on the time of year), it’s perfectly safe to walk home, even alone, at any time of the day or night. Spend a little extra time walking and you can save yourself quite a bundle in taxi fares.

5// Rent a car…but not for the whole trip.

If you’re basing yourself in Reykjavík for your trip, there’s not really any reason to rent a car for your entire trip. The city is extremely walkable and relatively easy to navigate, and if you don’t want to walk, reasonably cheap public transport is available as well. When you want to get out of Reykjavík (and you should, the rest of the country is staggeringly beautiful), it’s really easy, and not particularly expensive, to rent a car for 24 hours and take a day trip out of the city. If you’re staying in a hostel, it’s easy to gather a group together and split a car, and you’ll have some fun new friends to experience Iceland’s natural beauty with you! On my last trip to Iceland, four of us split a car for a day trip down the south coast (inspired by this post from I Heart Reykjavík) and, including gas and insurance, it only cost us about $30 USD per person. Not too bad for a whole day of sightseeing! Iceland’s natural attractions (like Geysir, various waterfalls, beaches, etc) are all accessible for free, so aside from food, the cost of renting our car was all the money we spent that day. However, if you’re planning to spend most of your time outside of the city, definitely plan ahead for renting your car, especially during the summer. They can be rather expensive to rent for longer periods of time, and you’ll want to find the best deals way in advance.

Have any other tips for saving money in Iceland? Share them in the comments!