Creating a Budget for Iceland

Google stock photo of Iceland! Can't wait to add my own real photos when we are back!

We are off to Iceland in the New Year! This is going to be a pretty short trip, only four days! We are going to meet up with one of my best friends and her husband who live in Australia. Since she and I are usually on opposite ends of the world, when she said she'd be in Iceland I knew I had to go!

I always create a budget for every trip we go on. I know some people chose to do it only for big trips but for us, because we travel so much, we like to know before we go how much we are comfortable spending. This post is all about how I created our budget for Iceland. At the end I've attached a chart breaking down every foreseeable expense.

Our trip budget for two people, for four days, including airfare is 2500$ CAD. We decided that for us 2500$ was our absolute max. In order to meet this budget we agreed we would only go on the trip if we got a good flight deal. WOW air usually has pretty cheap flights from Ontario or Quebec to Iceland. We got our flights for about 380$ each round trip. Considering its a 6hr flight 380$ seemed liked a good deal, although there have been better! Our other best friend was able to come along because she found an even better price after we had booked our tickets.

So right off the bat, from 2500$ we've spent 765$ on flights, thats just under a third of our budget. Once flights are booked, I began to look at popular things to do. We all made a list of the "must do" activities that we all want to see:
  1. The Blue Lagoon
  2. The Northern Lights (weather permitting)
  3. The Golden Circle
  4. Ice Caves & Diamond Beach
  5. Black Sand Beach
The Blue Lagoon is pretty pricey in comparison to the hot springs the locals use, its about 230$ for two tickets for the most basic package. However, it is on most peoples lists of must do things. If you are looking to save some money there are local hot springs that cost about 10$ and are an hour to an hour and a half drive from Reykjavik. Usually we would save the money and do the local hot springs but when travelling with a group you have to make compromises and I also like to look at is as an over all experience. When will I be in Iceland with my best friends again? I want to make as many memories as possible.

The next four items on our list can be free, or you can do them through a tour company. We opted to rent a car and do it ourselves. Our car rental is split between 7 people (we have some siblings joining us) and is about 155$/person for four days plus gas. To put that into perspective, most tours are around 200$USD/day/an outing. So we are saving a lot of money by doing it ourselves. 

One tour that everyone but us is doing, is the ice cave tour. Nick and I have decided to skip that one. Its 200$ for about 2hrs. It'll be really cool but for us 200$/person would put us way over budget or would take away from spending our money on something else. Instead, while everyone else is on the tour, we are going to explore Diamond Beach and the town near by, and then meet up for lunch with everyone.

As for accommodations, we have rented two AirBnBs. One in Reykjavik and one in Hella, a town about an hour and a half east of the capital. Again, because we are splitting it seven ways, we are saving a fair amount of money. We could have gotten an AirBnB for just us two, but it would have cost more, and a hotel would have been even more expensive.

Going out to eat in Iceland can be really expensive. The food scene is booming and there's lots of trendy restaurants. We agreed as a group that for our one night in Reykjavik we would go out for a reasonably priced dinner (around 35$/person/entree) and then in Hella, because it is a small town and because it gets dark so early that we would buy groceries and eat in the next three nights. This is a perfect compromise, it eliminates the need for a designated driver and also saves everyone money. I should also note that our AirBnB in Hella has a hot tub and we chose its location because being far away from big city lights we will have a better chance at seeing the Northern Lights.

The last time we all got together was in Australia for the wedding!! Can't wait to be reunited! 

Sticking to a budget when travelling is really hard. Its super easy to justify spending more money because you think "when will I be back here again?" The best way to stick to a budget is to do lots of research. Make sure there won't be any extra or hidden costs, really look up the things you want to do. In going to a new place you're never going to know exactly what to expect and there will always be things you uncover that wasn't part of your research. But in researching your trip before you go, you'll have a reasonable expectation of how much money you'll spend. It's also important to ask yourself why are you going on this trip? Is it a once in a life time opportunity you've been saving your whole life for? Is it just a get-away? For me, this trip is about spending a long weekend with some of the people I love most. It's not so much about Iceland but about who I'll be sharing the experience with. Iceland has been on my list of travel places for a few years, and I would love to explore more, see more, and be there for longer but this trip is not about that (at least not for me). If this trip were about seeing all Iceland had to offer, I would probably go 1) in the summer (longer days) 2) for longer (8-10 days) and 3) with a way bigger budget! Your budget has to reflect your goals and intentions otherwise it will fail and you'll either miss out on things you really wanted to see or do, or you'll spend way more money then you expected and can be left feeling a bit blindsided when you come home to your visa bill!

Here is my breakdown as promised.


Everything with an * is something we haven't spent money on and is something I've just estimated. I always like to over budget so that I know the absolute most I can spend on something and then chose to spend less and allocate the extra money for something else. Also remember that this budget is created for two people. The additional hot springs are the local hot springs I discussed, theres a chance that on one of our drives we will go and check them out! They all have minor entrance fees. Also we got our AirBnB in Reykjavik for two nights because our flight arrives at 430 am and we thought we might want to have a nap or a shower right after we land.

Got any questions about creating a budget or travel tips? Leave them in the comments below or comment on my Instagram @thenoamdicbee. You can always subscribe so that you never miss a post!

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