Iceland was always a dream for us with its magnificent landscapes and volcanoes, but we were postponing it for long time because we were afraid it will cost us fortune. One day we saw plane ticket offer for 130 euro (Airberlin) and we couldn’t resist despite the flight date was 8 months ahead and departure airport was 900 km away. In the end the whole 13 day long trip cost us 550 euros per person in total – included ticket, food and transport costs. This is Iceland on budget.

Transport

When it comes to the mean of transport over the Iceland renting a car is probably the most convenient especially if you are planning to visit some remote places. Hitchhiking seemed to us also possible but only on the ring road along which you can meet a lot of tourists. But once you leave ring road amount of cars rapidly decreases. And considering how quickly the weather might change in Iceland you probably don’t want to spend several hours next to the road exposed to Icelandic weather.
When one plan to rent a car in Iceland it is always a question: Should it be 4×4? In May almost all F-roads (accessible only by 4×4 vehicles) are closed, so for us it wouldn’t be of much use anyway and that’s why we decided to go for Hyundai i20 with Budget rental which cost us 378 euro for 12 days. It was bit too cosy for 4 people, but with bit of will and organization we managed without problems. You can compare car rental offers here.
However, it is up to everyone’s choice and plans and you should consult the official website road.is to find out the state of the roads.

Our stuffed car with 4 people, backpacks, tents and all the food. If you wonder what is on the ground – it is serving of dumster dived melon

Accomodation

Iceland is known to be one of the most expensive countries and the cheapest hostel will cost you 30 EUR at least and the price for double room can easily reach 200 EUR. That means accommodation might be one of the biggest expenses in Iceland on budget.
That’s why we decided to go for million-star hotel and sleep the whole trip in tent. Temperature at night was going close to zero, so good sleeping bag and mattress was necessary part of equipment, but camping on Iceland is fairly easy and it has one very big advantage. You can build your tent next to one of many hotpots and enjoy your private night bath without any tourists. These were best moments of whole trip for us – relaxing in hot water, nobody around, just beautiful peaceful nature in midnight sunlight.
Out of 11 nights we spent 2 in paid camping (1000 to 1400 ISK) to have proper shower plus last one in Reykjavik camping site (2100 ISK).

We wouldn’t сhange sleeping here even for 5 star hotel

Food and drinks

And the same story goes with food – meat and dairy products are very expensive and that’s why we decided to take with us to Iceland as much food as possible. But in Iceland there is limit that you can bring no more than 3kg of food and the meat you bring should be either canned or boiled (no sausages or salami).
However, we found out that it is possible to exceed the 3kg limit. As we were not sure about this information we contacted directorate of customs in Keflavik and we got this reply:
The excess food is charged as follows (May 2016):
– Meat products: 1240 ISK per kilo
– Cheeses and dairy products: 954 ISK per kilo
– Other food stuff: 83 ISK per kilo

Seeing the table above its obvious that bringing excess of meat and dairy products is not worth it, but other food stuff like pasta, kouskous, dried fruits, nuts, oatmeal and rice actually makes sense. And so we did it. We basically prepared 2 bags of food. One full of canned meat, fish and dairy products of total weight 3kg and second bag with other food stuff to declare as excess. After arrival to Keflavik we went to the red gate to pay the fee for the extra food. Lady behind the counter asked us what we wanted to declare and once she found out its only few kilos of other food stuff worth maybe 200 ISK (less than 2 euros), she told us to continue without paying.
Interesting is that we read that there are sometimes random check-ups of bags and people throw away lot of food. Either we were lucky or its good to be honest.

Despite we took a lot of food with us we still had to do some shopping in Iceland and we also tried dumpsterdiving.
Almost every bigger city has Bonus supermarket which has the lowest prices in Iceland and you can drink free coffee there. If we couldn’t find Bonus our second choice was Netto, which has bit higher prices, but still quite reasonable. Some examples of budget choices:

Bread – 500g: 249 ISK
Sausages (with 70% of meat) – 200g: 300ISK
Gouda cheese – 460g: 799ISK
Canned corn: 150ISK
Soft cheese/mayo spread – 150g: 150ISK

Alcohol (besides beer up to 2.5%) can be bought only in special governmental shops called Vinbudin. No need to say that it is very expensive, although we didn’t resist to buy few beers for night bath in hotpot – and it was really amazing to sit in hot water and enjoying peaceful nature while sipping beer. Some examples from Vinbudin shop follows.

Can of beer – 500ml: 275 to 800ISK
Cheap bottle of wine: 1000ISK
Decent bottle of wine: starting from 3000ISK
Bottle of strong alcohol: starting from 3000ISK

Drinking icelandic beer in hot pool during the white night

Iceland is great country for dumpsterdiving – cold temperature, not too many people and high standards. It was the first time we tried it and even for beginners like us it was very easy. There are big containers for food to throw away behind every bigger or smaller shop. Most of them are not locked, so it takes only to step out of the comfort zone, wait until nobody is watching and check what is being served there.

Big choice of products can be found in dumpsters.

Amongst our treasures were mangoes, dried goja, yoghurts, grapes, oranges. All of them of good quality and even following days proved that as our bellies were not protesting.
Eating out is definitely not for Iceland on budget traveller and that’s why we were always cooking on our own. Once we went to bar to have a cup of coffee for 490ISK and of course we couldn’t leave Iceland without trying local specialty – fermented shark. 4 super small pieces of shark were 500ISK in café just next to main church in Reykjavik. If you wanted to have a shot of local spirit with it, you would have to pay another 1000ISK for that.

Fermented shark

Sum up – Iceland on budget

Summarizing of all our expenses for Iceland on budget 12 days trip (per 1 person) – 550 euros:
Car rental and petrol: 150 euros
Plane tickets and transport to airport: 170 euros
Food bought on Iceland, café, camping, cooking gas: 130 euros
Food bought before the trip: 100 euros

And one more advice. Don’t visit famous paid hotpots like Blue lagoon or Myvatn. With bit of effort you will find remote ones without people and totally for free because best things in life are free!
But more about that in our second Iceland article where we describe our journey with tips where to sleep next to hotpots for free and much more. It is definitely possible to do Iceland on budget.