Iceland is one of the most beautiful places I’ve seen in my life. The natural phenomenons that occur there; in landscape, weather, and overall nature is purely astounding. My trip to Iceland was planned on a whim with the sole intention of checking ‘see the northern lights’ off my bucket list, but it gave me so much more than I could’ve expected.

The idea to go to Reykjavik to see the northern lights came from a Groupon, which listed “three nights in Iceland, flight and hotel included for $800 a person.” I thought that was pretty inexpensive but for a flight that long I wanted to longer than three nights. I went onto expedia.com and by bundling I was able to get 6 nights stay, round trip flight, AND car rental (pre-upgrade) for only $723 per person.

Since this happy accident I’ve done this with every trip I’ve planned, and it’s always given me a much cheaper price than buying a pre-bundled trip.

When to Visit

The best time to see the northern lights in Iceland is between November and March, so I went smack dab in the middle of January. Despite the biting cold, insane weather, and expensive food, Iceland in January did not disappoint. We made the most of our trip with adventures like driving the Golden Circle, a glacier hike, visiting museums, a boat tour to see the northern lights, and so much more.

I know this sounds super boujee, but we were able to save in some of the following areas to budget for the experiences that made it the trip of a lifetime!

Food & Booze

Food in Iceland is pricey; any sit down dinners we had cost about double what the same meal would cost here in the United States. While there were a few meals where we got a little spendy (how do you go to Iceland and not try the fresh seafood!?) we tried to eat most meals from the grocery store. Our hotel had breakfast included; an amazing spread of meats, cheeses, pastries, and of course Skyr – Icelandic style yogurt, that we took advantage of every morning. We also bought a lot of snacks and sandwich meats that we kept in the car, and some easy grocery store meals that we could heat up in our hotel at night.

Side note: be aware that at this time of year it’s hard to find somewhere to get a meal after 9PM. With the time difference, we weren’t hungry until after this point and ended up having gas station dinners on a couple different occasions. There is a hotdog stand in Reykjavik that is open late, and if you get the chance to go there it’s not too pricey and worth every savory bite.

When it comes to booze, DEFINITELY hit up the liquor store. The cheapest beer I got while out at the bars was $12. It adds up quickly – especially if it’s too late to get food there and suddenly you’re depending on a liquid dinner. Before you know it you’ll be three sheets to the wind, eating fermented shark and chasing it with vodka because a local told you to.

Lastly if you’re anything like me, you drink a TON of water. Water bottles there were between $3 – $4 each. I bought 3 at the beginning of the trip and refilled them the entire time, which saved us a lot of money. The drinking water there is from glaciers, so it’s cold and crisp and better than the bottled stuff, if you ask me.

To Rent a Car or to Not Rent a Car

This is the part I messed up a little with my research. When I initially rented a car, I got us a small sedan style car for about $150, which was included in the initial costs I pulled together. Upon arrival, we were informed that they strongly suggest (insisted) we get a 4WD car as the roads had been very bad from the frequent snowstorms. We also found out that we needed to purchase separate international insurance, because our domestic plans did not cover it. $600 later, we had a rental car.

While this was very expensive and gas was pricey as well, I have to say it was worth it. We avoided the costs of tour buses (which likely would’ve been the same, if not more for the excursions we did) and we ended up needing the 4WD as snow storms come in fast and hard. It was also nice to be able to load up the car with whatever we needed for the day and not have to worry about getting food/water/extra layers of clothing.

Replace the Tourist Traps with Local Wonders

If you haven’t caught on, I’m not a big fan of tour buses; too many people sticking their cameras in your front of your view, talking loudly and eating something with onions on it. Getting a car gives you the freedom to create your own schedule, and you’ll avoid inflated costs of transportation typically included in tours.There is so much to see in Iceland, and I definitely recommend driving the Golden Circle on your own. There are so many places you can stop, and best of all it’s free.

Apart from that, we did not visit the Blue Lagoon.*gasps* I know, I know. Instead, we found something better: Laugarvatn Fontana. This beautiful, natural hot spring was a local treasure that was half the cost of Blue Lagoon and not crowded at all. When we went around 7PM we had the place entirely to ourselves. This could partially be due to the snowstorm that moved in and shut down all the roads while we were there, but imagine sitting in a natural hot spring with the snow falling around you. Magic.

There are also a lot of hot springs you can bathe in all over Iceland that are free. We heard of one from locals called Hot River Coffee in eastern Iceland, which is a short hike up a mountain side and known to have great views of the northern lights. Just wary of temperature as some of these springs are too hot to take a dip in.

Lastly, museums are a really inexpensive way to learn about Iceland. Tickets were fairly inexpensive, ranging from $10 – $30 per person. We visited the Viking World Museum, the Saga Museum, and Perlan – a really cool ice cave exhibit that talked about Iceland’s changing environment and let you walk through man-made ice caves.

What to Splurge on

If there is one tour that’s entirely worth the cost it would be to see the northern lights. While it is a natural phenomenon that can potentially be seen anywhere in Iceland, the guides know where to look and usually have really interesting facts and stories to tell while you search the skies. We went out by boat, and they provided us with warm winter gear and hot beverages onboard. It cost about $100 per person, but was worth every penny to check that off my bucket list.

Apart from that, if for only one meal I recommend you try authentic Icelandic cuisine. We went to Messinn which was phenomenal, I got the Arctic Char and Austin got Plokkfiskur; a delicious fish stew with potatoes and onion.

Bon Voyage!

I hope these tips have helped! If you’re planning a trip to Iceland soon, where are you going? What places do you want to see? Share in the comments below.