13-Day Ultimate Budget Backpacking Route in Iceland
Iceland is often labeled as one of the most expensive destinations on earth, but for the savvy backpacker, the 'Land of Fire and Ice' is surprisingly accessible. By skipping the expensive rental cars, avoiding high-end restaurants in favor of local grocery stores like Bónus, and focusing on the country's abundance of free natural sites, you can experience the magic of the North Atlantic for a fraction of the usual cost.
This 13-day journey utilizes the Strætó public bus network to connect major hubs while keeping your living costs lean. You'll stay in vibrant hostels, cook your own meals, and discover that the best things in Iceland—the towering waterfalls, the crashing basalt surf, and the dancing Aurora—don't cost a single króna.
Day 1: Arrival & Exploring Reykjavík
Arrival at Keflavík Airport
Touch down and clear customs. Collect your bags and prepare for the crisp Icelandic air.
Strætó Bus to Reykjavík
Take the public bus Route 55 or a shuttle into the city center to reach your hostel and drop off your gear.
Bónus Grocery Run
Head to the nearest Bónus (the yellow pig store) to stock up on pasta, skyrr, and bread for the week to keep food costs ultra-low.
Sun Voyager Sculpture
Take a free sunset stroll along the waterfront to see this iconic stainless-steel ship sculpture.
Day 2: Reykjavík - Culture on a Budget
Free Walking Tour
Join a tip-based walking tour to learn about Viking history and the city's quirky architecture.
Bæjarins Beztu Pylsur
Enjoy Iceland's most famous 'street food'—a lamb-based hot dog with all the trimmings for just a few dollars.
Harpa Concert Hall
Explore the stunning glass geometric architecture of this cultural landmark for free.
Hallgrímskirkja Exterior
Marvel at the basalt-inspired facade of Iceland's largest church. Walking the grounds is free of charge.
Day 3: Selfoss - Gateway to the South
Bus Route 51 to Selfoss
Board the Strætó bus heading South. Watch the landscape shift from urban sprawl to moss-covered lava fields.
Reykjadalur Hot River Hike
A short bus or hitch from Selfoss leads to Hveragerði, where you can hike 3km to a free natural thermal river for a soak.
Selfoss Library & Park
Explore the local community library for free Wi-Fi and warmth before heading to your accommodation.
Hostel Cooking Session
Prepare a communal dinner with fellow travelers using your Bónus supplies.
Day 4: Vík - Black Sands and Basalt
Bus to Vík í Mýrdal
Continue your journey east on Route 51. The views of the Eyjafjallajökull volcano from the window are priceless.
Reynisfjara Black Sand Beach
Walk to the world-famous black sand beach to see the massive basalt columns and sea stacks.
Vík i Myrdal Church
Hike up the hill to the red-roofed church for the most iconic panoramic view of the village and the ocean.
Voyageur Monument
A peaceful walk along the coastal path to see the monument dedicated to the friendship between Iceland and the UK.
Day 5: Vík - Waterfalls and Wonders
Skógafoss Day Trip
Take the local bus back slightly west to Skógar. Stand in the mist of the massive 60-meter waterfall.
Skógar Museum (Exterior)
Walk around the traditional turf houses located just outside the museum for a free glimpse into old Iceland.
Waterfall Way Hike
Climb the stairs at Skógafoss and hike a portion of the Fimmvörðuháls trail to see multiple smaller falls.
Bus back to Vík
Return to your hostel in Vík for a final night in the southern village.
Day 6: Höfn - The Lobster Town
Eastward Bound Bus
Travel further east into the Vatnajökull region. This is one of the most scenic bus routes in the country.
Arrival in Höfn
Check into your hostel and take a brisk walk around the harbor of this fishing town.
Höfn Coastline Walk
Follow the nature trail along the shoreline with incredible views of the distant glaciers.
Budget Lobster Soup
While lobster is pricey, many local gas stations or small cafes offer a 'budget' version of lobster soup that is filling and delicious.
Day 7: Höfn - Jökulsárlón Glacier Lagoon
Shuttle to Jökulsárlón
Visit the crown jewel of Iceland. Watch icebergs drift from the glacier out to the Atlantic Ocean.
Diamond Beach
Cross the road to the black sand beach where ice chunks wash up like giant diamonds—completely free to explore.
Fjallsárlón Viewpoint
Walk to this nearby, lesser-known glacial lagoon for a much quieter and equally stunning experience.
Return to Höfn
Pack your bags for the long transit day ahead tomorrow.
Day 8: Akureyri - Crossing to the North
The Long Road North
Take the connecting buses (or a pre-booked regional coach) through the Eastfjords toward the Capital of the North.
Egilsstaðir Pitstop
Stretch your legs and grab a quick snack at the regional hub of the East before the final leg.
Arrival in Akureyri
Check into your Northern base. Akureyri is much more affordable and walkable than Reykjavík.
Akureyri Church (Akureyrarkirkja)
Visit the sister church to Hallgrímskirkja, standing tall over the fjord.
Day 9: Akureyri - Fjord Life
Free City Bus
Take advantage of Akureyri's unique perk: the city buses are completely free for everyone!
Botanical Gardens
Wander through one of the northernmost botanical gardens in the world. Entry is free.
Listagilið (Art Canyon)
Walk through the artsy district and window-shop the local galleries and studios.
Fjord-side Walk
Walk along the Eyjafjörður coast at twilight for stunning mountain reflections.
Day 10: Akureyri - Goðafoss Excursion
Bus to Goðafoss
Take Route 56 toward the 'Waterfall of the Gods,' one of the most spectacular sights in the North.
Goðafoss Exploration
Walk both the east and west banks of the falls for different perspectives on the horseshoe drop.
Laufás Turf Homes
If timing allows, visit these well-preserved traditional dwellings nearby to see how Icelanders lived for centuries.
Return to Akureyri
Enjoy a local beer at a harbor-side bar to celebrate your northern adventure.
Day 11: Reykjavík - The Return Journey
Route 57 Westbound
Board the long-distance Strætó back to the capital. This 6-hour drive is basically a tour of West Iceland.
Borgarnes Stopover
The bus stops in this historic town. Grab a quick bite and enjoy the views of the Borgarfjörður.
Back in Reykjavík
Check into a different neighborhood hostel to see a new side of the city.
Laugardalslaug Pool
Skip the Blue Lagoon and join the locals at the city's largest public pool for a few dollars. It has geothermal hot tubs!
Day 12: Reykjanes - Volcanic Peninsula
Bus to Keflavík
Head back toward the airport area for your final night, staying in a cheaper guesthouse nearby.
Gunnuhver Hot Springs
Explore this highly active geothermal area with mud pools and steam vents for free.
Bridge Between Continents
Walk across the small footbridge that spans a fissure between the Eurasian and North American tectonic plates.
Final Bónus Dinner
Cook one last budget feast and share your travel stories with the hostel community.
Day 13: Departure from Keflavík
Local Bus to Terminal
Take the quick local bus or hostel shuttle to the airport terminal.
Duty-Free Souvenirs
If you have any leftover Krona, the duty-free shop is actually the cheapest place in Iceland to buy local chocolate or salts.
Flight Departure
Board your flight home with a camera full of photos and a wallet that isn't empty.
Final Farewell
Look out the window for one last glimpse of the glaciers and volcanic peaks from above.
Best Time to Visit Iceland
For budget backpackers, the best time to visit is during the shoulder seasons of May and September. During these months, you get enough daylight to explore and the Strætó bus system is fully operational, but accommodation prices are significantly lower than the July-August peak. If your primary goal is the Northern Lights, visit between October and March, but be prepared for limited bus schedules and much colder weather which requires better (and more expensive) gear.
Currency & Money
The local currency is the Icelandic Króna (ISK). Iceland is nearly 100% cashless; you can pay for everything from a public bus fare to a single hot dog with a contactless card or phone. Tipping is not expected and is already included in service charges. To save money, always choose to pay in the local currency (ISK) on card terminals to get a better exchange rate from your home bank.
Getting Around Iceland
While most tourists rent cars, the Strætó public bus system is a viable way to reach major towns. Use the Strætó app to buy tickets and track buses in real-time. For more remote areas like the Golden Circle or specific waterfalls, 'tourist' buses like the South Coast Adventure or Reykjavik Excursions offer 'hop-on-hop-off' styles, though they are more expensive than the public lines. Hitchhiking is also remarkably safe and common in Iceland during the summer months, providing an excellent way for budget travelers to fill the gaps between bus stops.
