Travel Smart: How to Spend $3,700 in Iceland for 12 Days

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! Our dear friends at Skyscanner and travel blogger Pohtecktoes show Singaporeans how to get the best out of spectacular Iceland on a budget without having to rough it.

It’s no secret that Iceland is expensive. While it isn’t 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: 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!

Below, best tips on seeing Iceland on a budget:

#1 Choose the right season to visit

While the temperature in Iceland is the most comfortable in summer (avg. 10-13°C), it is also the most expensive period to visit. Tourists flock to Iceland during summer, so demand for tourist essentials are very high. Accommodation (find one at Reykjavik here) and vehicle rental can end up being 2-4 times higher than the price in winter!

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In winter, you can avoid the summer crowds, keep things affordable and stand a higher chance to spot the Northern Lights.

Which is why for the budget conscious, the best season to visit Iceland is winter (November to March).

#2 Stay in hostels (instead of hotels)

If you are sharing a room, staying in a hostel is an economical option.

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

Address: Bankastræti 7, 101 Reykjavik

Great location with a cosy lounge and bar at the top level that has a view of downtown Reykjavik. Book a room here

Where to stay along the south coast

Vík HI 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. Book a room here.

Vagnsstaðir HI Hostel

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. Book a room here.

#3 DIY your itinerary (instead of taking tours)

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.

Stay updated of the latest road conditions; winter might spell unfavourable weather conditions.

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 for 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.

Insider’s Tip: Check for updates on road conditions every three hours here. Especially in winter, the weather can change very quickly and roads may be icy or closed.

#4 Cook your own food

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 a bonus, 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.

iceland travel

A traditional Icelandic soup.

Of course, we indulged occasionally and made sure we tried all the famous Icelandic dishes too!

Insider’s 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.

#5 Book flights in advance

Last-minute flights from Singapore to Iceland can be 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 (book yours here) five months in advance, from Singapore to Reykjavik, with one stopover in Helsinki.

Budget Summary (per pax):

Item Cost (per pax)
Flights S$1,331
Accommodation S$771
Food S$425
Activities (ice caving, horse riding, entrance fees) S$370
Public transport S$24
Car rental S$782

Total expenditure/pax = S$3,703 (see here for the full itinerary and budget breakdown).

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