5 Best Tips for a Holiday to Iceland on a Budget

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Have you been dreaming of seeing the beautiful Northern Lights? Wrap up warm, explore ice caves, and be blown away by the natural beauty of Iceland and its friendly capital Reykjavik on a once-in-a-lifetime winter vacation! Skyscanner and travel blogger Pohtecktoes show Singaporeans how to get the best out of spectacular Iceland on a budget without having to rough it!

How to get the best out of Iceland on a budget

While Iceland isn’t exactly a budget destination, you don’t have to break the bank in order to visit. In fact, we only spent about S$3,700 each for 12 days in Iceland inclusive of flights! The best part is that anyone can travel from Singapore to Iceland on a budget – without having to sacrifice too much comfort or miss out on any major activity. We even indulged in food and accommodation now and then!

Tip # 1. Choose the right season to visit

Gullfoss waterfall in winter. One of the highlights of the popular Golden Circle route. Photo credit: Pohtecktoes

The temperature in Iceland is the most comfortable in summer (avg. 10-13°C), but it is also the most expensive period to visit. Tourists flock to Iceland during summer, so demand for tourist essentials are very high. Accommodation and vehicle rental can end up being 2-4 times higher than the price in winter! Which is why for the budget conscious, the best season to visit Iceland is winter (November to March). Not only are things more affordable, you can also avoid the summer crowds, and have a much higher chance of spotting the Northern Lights.

Related: 8 Ways to Prepare and Deal with Disasters While Travelling

Tip #2. Stay in hostels rather than hotels

View of the stars just outside our hostel. Photo credit: Pohtecktoes

Choose hostels instead of hotels while booking accommodation in Iceland. Why spend extra paying for hotel facilities you hardly use? After all, you want to spend more time exploring the sights instead. Hostels also often have communal kitchens, which means you can cook from time to time to keep costs down.

There were two of us and we shared private rooms throughout our stay in Iceland. If you choose to sleep in dormitories, it’ll be even cheaper!

Where to Stay in Reykjavik: Reykjavík Loft Hostel

Photo Credit: Hostel World

Address: Bankastræti 7, 101 Reykjavik
Great location with a cosy lounge and bar at the top level that has a view of downtown Reykjavik.

Where to stay along the south coast: Vík HI Hostel

Photo Credit: Hostel

Address: Suðurvíkurvegur 5
Most affordable accommodation in Vik, which is a small town perfect for stocking up on supplies and visiting sights along the south coast. Walking distance to the black sand beaches, with little light pollution and cliffs that form the perfect backdrop for the northern lights.

Vagnsstaðir HI Hostel

Photo Credit: Skyscanner

Address: Suðursveit, A-Skaftafellssýsla
Surrounded by a ring of mountains, this is an ideal base for exploring the Vatnajökull region. It is literally on a farm, so the surroundings are dark and ideal for viewing the night sky. Do stock up on supplies though, because the nearest grocery store is 50km away.

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Tip #3. DIY instead of taking tours

Sights like Skógafoss are just off the main highway and are free! Photo credit: Pohtecktoes

Unless you want to do an activity that needs guides and special equipment like ice caving or horse riding, there’s no reason to spend extra on tours. Almost all the famous sights in Iceland are free of charge, and you can easily visit them on a do-it-yourself self-drive tour.

If you are travelling with a small group of friends, it makes even more sense to DIY as you can split the cost of car rental. Instead of sticking to the rigid schedule of a tour, you can travel at your own pace, stopping as often as you like, marvelling in the beauty of the countryside around you.

Tip: Check for updates on road conditions at Road.is every 3 hours. Especially in winter, the weather can change very quickly and roads may be icy or closed.

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Tip #4. Cook your own food

From left to right, top to bottom: Smoked Puffin, Icelandic Sea Trout, Lobster Tails, Blue Ling, Minke Whale, Icelandic Lamb. Photo credit: Pohtecktoes

Food is pretty expensive in Iceland. A simple meal can easily cost S$20-30, so it makes sense to cook in order to keep costs low. Most days, we cooked our own breakfast and dinner, and either packed extra food or ate out for lunch. The cheapest supermarket is probably Bónus, so try to get your supplies from there.

To be honest, cooking our own meals was pretty fun and we got creative after a while. It was also a great way to make friends while sharing food with other travellers in the kitchen.
Of course, we indulged occasionally and made sure we tried all the famous Icelandic dishes too!
Tip: Outside of Reykjavik, supermarkets and convenience stores are harder to find. Make sure you stock up on supplies whenever you pass by a town!

Related: The Value of S$5 around the World

Tip # 5. Book flights in advance

Last-minute flights from Singapore to Iceland are expensive. I suggest searching and monitoring flights early to get the best deal. If you have some flexibility, use the “Whole Month” or “Cheapest Month” option on Skyscanner to search for cheap flights. I also used the “Price Alert” feature to monitor changes in flight prices.

After a few weeks of monitoring, I finally booked a return flight 5 months in advance, from Singapore to Reykjavik, with 1 stopover in Helsinki.

Budget Summary (per pax):


Cost (per pax)







Activities (ice caving, horse riding, entrance fees)


Public transport


Car rental


Total expenditure (per pax) = S$3,703

Ready to explore Iceland on a budget for your next getaway? Book cheap flights, hotels and car rental via Skyscanner or check out and download the free Skyscanner mobile app for easy browsing and booking on the go.

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Inspired by Pohtecktoes’ travel and ready to explore Iceland on a budget for your next getaway? Find the cheapest flights with Skyscanner Sky Deals or download the Skyscanner app for Android and iOS for easy browsing and booking on the go.

This article first appeared on Skyscanner.



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