Planning an Unforgettable Iceland Road Trip on a Budget

Iceland is the kind of place that changes you. The ice capped mountains, black sand beaches, and bright blue water transport you to another world and frame of mind. In the land of Icelandic ponies, hot springs, and unspoiled countryside, the hustle and bustle of everyday life ceases to exist, and suddenly you’re googling how to sell all of your belongings to live in a 100 square foot tiny house at the foot of a mountain. Or so I’ve heard.

When my husband and I were choosing a vacation spot to celebrate our one-year wedding anniversary, we thought through plenty of options. Honestly, I think every single day I came up with at least three more possibilities. (PSA: You’ll be struck with the same kind of indecision if you spend your spare time perusing Airbnb.)

Still, nothing could quite compare with the prospect of traveling to Iceland. Airfare was reasonable and it’s only a five-hour flight from the East Coast. Both of us were endlessly curious about the country that had recently become a major hotspot with travelers, and we were dying to see what all the fuss was about. The only downside? While flying to Iceland may have been affordable, staying in Iceland is notoriously pricey. But with a little strategic planning, we knew we’d be able to plan an unforgettable trip, even on our modest budget. Here’s how we did it!

1. Invest in a reliable car.

We planned our trip for the last week of March, when the weather was more manageable than even just a few weeks prior, but we knew there was still a good chance we’d run into difficult conditions on the road. Two out of the three houses we decided to rent for our trip were in the middle of nowhere (and required four wheel-drive to get there).

Let me be the first to tell you that renting a car in Iceland is an investment in both time and money. We quickly found ourselves overwhelmed by the process and the cost once we had to factor in the different types of insurance needed (sand and ash protection, gravel protection, etc.) as well as a navigational system. After researching for weeks, we decided to work with Blue Car Rentals, a local family-owned company that already includes all necessary insurance in their pricing. So what you see is what you get.

We knew several people who were fine without 4WD in the warmer seasons, but considering the remote nature of our lodging and the questionable roads (some shouldn’t even be called roads) we encountered when we ventured off The Ring Road, we were thankful we had it.

Bottom line? Map out your itinerary so you fully understand what the trip will require and be sure to book far in advance to avoid sky high pricing. Brace yourself for this to be one of the most expensive aspects of your trip, but know it will be well worth it. My favorite parts of the journey were seen through the passenger seat of our Hyundai Santa Fe, when we’d turn the corner to discover a sudden moody scene of black mountains and deep blue water.

Source: Danielle Moss

Source: Danielle Moss

2. Prioritize your time (but stay flexible).

Unlike traveling to a big city like Paris or New York, you can’t rely on stepping outside of your hotel on foot and spontaneously seeing where the day will take you. We used My Maps from Google to help plan our itinerary, driving distances, and routes—it was a huge life saver to accurately figure out what we could accomplish in a day.

We learned to factor in an extra thirty minutes or so for each leg of the journey in the event we ran into difficult weather or had to reroute. In general, resist planning more than 2-3 stops in one day to allow yourself the opportunity to go off the beaten path and explore when you (undoubtedly) come across a scene that catches your eye.

Source: Danielle Moss

3. Choose a home over a hotel.

Iceland’s recent surge of tourism means increased lodging options, even in the countryside. We decided to go the Airbnb route, which gave us the most bang for our buck by far.

We were able to experience jaw-dropping views at totally reasonable prices, and it made any downtime at “home” still feel like a unique experience even though we weren’t out actively doing things. It was a relief to have a lazy morning or call it an early day without feeling guilty that we were missing out on all that Iceland has to offer.

Traditional timber house in BorganesThe Timber House set in Borganes is in a beautiful location that feels remote but is still accessible to grocery stores, cafes, and anything else you might need. Be sure to visit The Settlement Center while you’re in town—it’s the perfect spot for lunch and to learn all about Iceland’s history.

A piece of heaven in BúðardalurThis setting was truly unmatched by any place I’ve ever visited. The views are surreal and just being there feels like an incredible experience. It’s positioned in a perfect spot to visit the Snæfellsnes Peninsula and Stykkishólmur—a charming fishing town that feels straight out of a novel.

Cozy apartment in downtown ReykjavikThis incredibly affordable and quaint home is situated in a perfect spot of Reykajvik, allowing you to walk outside your door and immediately start exploring. Stroll through the numerous specialty shops and cafes, and carve out some time to visit the infamous Blue Lagoon. If you want a more budget-friendly option, try the Secret Lagoon, a less luxurious but great option when splurging on a spa day isn’t in the budget.

4. Get creative with meals…

Having access to a full kitchen was imperative for us stay within our budget. We made a point to get to the grocery store, prep lunches and snacks in advance, and cook dinners at home. Finding a spot on the road to enjoy our picnics with a beautiful backdrop (from the comfort of our heated seats) was a perfect way to enjoy the scenery. And the fact that it didn’t break the bank was a major bonus.

5. …but still experience the local food scene.

By the time we made it to Reykjavik (our last stop on the trip), we had saved enough money by prepping meals at home to justify a few splurges and came away with a list of favorites.

Forettabarinn ($$): This is the perfect spot to try many types of Icelandic cuisine—it’s all small plates. Get the braised beef brisket quesadillas with black bean and coriander salsa or the wild goose, if you’re feeling adventurous.

Stofan Cafe ($): I can’t imagine anyone walking into this place and not immediately falling in love. The atmosphere is incredibly cozy and inviting, and you could sit here for hours without a second thought. It’s both a cafe and a wine bar with delicious baked goods, and a great happy hour to boot.

Reykjavik Roasters ($): One thing I didn’t realize before visiting is that Icelanders take their coffee very seriously. I had some of the best lattes of my life in this country, but none compared to Reykjavik Roasters. The quaint and unassuming vibe of the cafe just made me love it even more.

Snaps ($$$): We desperately wanted to try Snaps after reading the rave reviews, but knew that the cost for two could add up quickly. To keep our bill down, we stuck to only appetizers and drinks (get the smoked salmon and mussels). We showed up without a reservation, which is risky, but got lucky enough to score a spot at the bar. The vibe is laidback and effortless while still feeling upscale and special, and the service was fantastic.

Noodle Station ($): We ventured in after a long day of shopping and decided that noodles at home in our cozy Airbnb would be the perfect way to end the evening. The food is simple, incredibly flavorful, filling, and cheap. All in all, it’s the perfect way to warm up after a day exploring Iceland.

Have you been to Iceland? How did you make the most of the trip on a budget?