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The 7 Best Ways to Spend Your Money in Iceland, According to Locals

Iceland Insider Guides Budget Travel
by KT Browne Jun 11, 2018

Iceland is a very trendy destination, but, despite the recent increase in crazy-cheap airfare, it’s certainly not the most affordable country to visit — by far. But for what it’s worth, there are ways that the thrifty traveler can enjoy a trip to the land of fire and ice — without breaking the bank!

1. Shop at the arrivals hall duty-free store.

According to Icelanders, it’s a sin to skip the obligatory trip to the duty-free store in the arrivals hall at Keflavík Airport. To put things into perspective, a bottle of red wine from the duty-free store costs 1.599 ISK ($15 USD), while that same bottle costs 2.199 ($21 USD) from the liquor store, Vínbúðin. So get your jet-lagged self off the plane, grab a basket, and follow the crowd of Icelanders into low-price heaven.

If you missed the obligatory trip to the arrivals hall duty-free store (or already ran out of your supply), the next best thing you can do is buy your booze at Vínbúðin. There really isn’t anything better than enjoying a Víking Classic beer for 249 ISK ($2.50 USD) while watching a cascading waterfall.

2. Spend the day at the Nauthólsvík geothermal beach.

Une publication partagée par Bec Theobald (@bectheo) le

Sure, Iceland has no shortage of swimming pools that you can frequent, but it has only one geothermal beach! Spend the day at Nauthólsvík in Reykjavík for exactly 0 ISK ($0 USD) during the summertime and feel like a true local. There’s even a non-stop barbeque at the beach during the summer where you can always get a cheap meal — a burger or hot dog will cost you around 500 ISK ($5 USD). This (free) access to the beach also includes a chance to dip into the surrounding hot tubs and, of course, some priceless conversation with locals!

3. Hang out in gas stations.

Though the thought of spending an afternoon chatting with a buddy in a gas station might sound a bit odd, it’s a strangely Icelandic thing to do, especially in remote towns outside of the capital. Olís and N1 are the two gas station chains in Iceland, and both serve surprisingly tasty coffee and food. A “combo” meal including a burger, fries, and a drink will cost you around 2.000 ISK ($20 USD). It’s not cheap-cheap, but it’s certainly cheaper than a meal at a café somewhere in Reykjavík.

4. Eat at the famous hot dog stand in Reykjavík.

Gas station not cutting it for you? Try out Bæjarins Beztu Pylsur — the one and only (famous) hot dog stand in downtown Reykjavík. Hot dogs are, oddly enough, a quintessentially Icelandic food; and Icelanders take them very seriously, not to mention the many sauces and toppings they’ve whipped up for them over the years. A simple hot dog will run you about 700 ISK ($7 USD) and will leave you feeling full but not broke!

5. Camp when the weather allows it.

In a country where it’s nearly impossible to book a single room in a hotel for less than $100 USD, camping ought to be given a bit more credit. Sure, Icelandic weather can be a beast at times, but if you travel to the country during the summer months, pitching a tent in one of the country’s many camping sites is a fantastic option and one that Icelanders take very seriously. Nobody wants to be inside anyway when there are jaw-dropping landscapes in every direction. It costs 1.200 ISK ($12 USD) to camp at any of the sites, and only 800 ISK ($8 USD) more for electricity. But who needs electricity when you have the midnight sun all summer?

6. Buy discount meat at Kjörbúðin.

Oh, Kjörbúðin — the Great Icelandic Supermarket! Make sure you head here to stock up on your camping grub, but don’t waste your time browsing the aisles for (overpriced) items when you have a whole section of the store devoted to discount meat. Look out for plastic-wrapped, pre-seasoned lamb and horse meat (yes, that’s a thing in Iceland) with a sticker that says “Tilboð 50%” — a piece of meat for two will run you about 1.300 ISK ($13 USD). Unlike many things in Iceland, the discount meat at Kjörbúðin is surprisingly normal-priced (and better-than-normal delicious).

7. Shop at the Kolaportið flea market.

Kolaportið is Iceland’s only flea market. Even if you don’t have anything in particular that you want to buy, simply browsing the labyrinth of Icelandic licorice (a local favorite), antiques, and records promises to be fulfilling. There is no entrance fee to the market, and even if you do have some cash to spare, prices here are far cheaper than elsewhere. A traditional hand-knit Icelandic sweater (Lopapeysa) costs around 10.000 ISK ($100 USD) at the flea market as opposed to in clothing shops around downtown Reykjavík, where you probably can’t find one for less than 20.000 ISK ($200 USD)!

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