16-Day Ultimate Budget Backpacking Route in Iceland
Backpacking across Iceland is often seen as a luxury endeavor, but with a strategic approach, it becomes a world-class adventure for the budget-conscious. This 16-day itinerary focuses on the 'slow travel' method, utilizing the national Strætó bus network and local grocery stores like Bónus to keep costs manageable while witnessing the most dramatic landscapes on Earth.
By prioritizing free natural wonders—of which Iceland has many—and staying in communal hostels or campsites, you'll experience the authentic, rugged side of the North Atlantic. Prepare for changing weather, breathtaking hikes, and the unique camaraderie of the Icelandic backpacking community.
The Itinerary
Day 1: Reykjavik, Iceland - The Budget Arrival
Arrival at Keflavík Airport
Touch down and skip the expensive taxis. Board the public bus or a pre-booked shuttle to reach the capital city.
Settling into Kex Hostel
Drop your bags at this trendy, converted biscuit factory. It's a hub for budget travelers and offers a great social atmosphere.
Free Walking Tour of Reykjavik
Join a tip-based walking tour to see the Alþingi (Parliament), the pond (Tjörnin), and the colorful streets of old town.
Grocery Run at Bónus
Head to the 'yellow pig' store to stock up on essentials. Cooking your own meals is the #1 way to save money in Iceland.
Day 2: Reykjavik, Iceland - Coastal Views & Culture
Hallgrímskirkja Church
Admire the stunning expressionist architecture of Iceland's tallest church. The exterior is free to visit and perfect for photos.
Harpa Concert Hall
Explore the geometric glass honeycomb of Harpa. It’s free to enter the lobby and enjoy the architectural views of the harbor.
The Sun Voyager
Walk along the sculpture waterfront to see Sólfar, an iconic stainless steel dreamboat representing hope and freedom.
Laugardalslaug Public Pool
Skip the expensive Blue Lagoon. For a few dollars, join locals in the geothermal hot tubs and Olympic-sized pools.
Day 3: Golden Circle, Iceland - Geological Marvels
Þingvellir National Park
Take the public bus to the site where the tectonic plates meet. Walk through the Almannagjá fault for free.
Geysir Geothermal Area
Watch Strokkur erupt every few minutes. Access to the park and the geothermal paths is completely free.
Gullfoss Waterfall
Marvel at the 'Golden Falls' where the Hvítá river plunges into a deep canyon. The viewing platforms are free and accessible.
Back to Reykjavik
Return to the city for a communal dinner at your hostel, sharing stories with other backpackers.
Day 4: Vík, Iceland - The South Coast Journey
Bus to Vík í Mýrdal
Board the long-distance bus heading east. Keep your camera ready for the volcanic scenery passing by.
Seljalandsfoss Stop
Many buses stop here briefly. It's the famous waterfall you can walk behind. Entry is free (parking fees only for cars).
Skógafoss Hike
Climb the stairs next to this 60m waterfall for a view of the coastline before continuing your journey to Vík.
Arrival in Vík
Check into the Puffin Hostel and walk to the iconic red-roofed church overlooking the village.
Day 5: Vík, Iceland - Black Sands & Basalt Columns
Reynisfjara Beach
Walk to the world-famous black sand beach. Admire the basalt stacks of Reynisdrangar jutting out from the ocean.
Dyrhólaey Promontory
A moderate hike from Vík leads to these massive sea arches. During summer, this is a prime spot for puffin watching.
Vík Coastal Path
Explore the rugged cliffs east of the village for secluded views of the Atlantic waves.
Bæjarins Beztu Pylsur Vík
Grab a classic Icelandic hot dog—the most famous and affordable 'street food' in the country.
Day 6: Skaftafell, Iceland - Glacier Gateway
Bus to Skaftafell
Continue east toward Vatnajökull National Park, passing through the vast Skeiðarársandur plains.
Svartifoss Hike
Take the 1.5km trail to the 'Black Fall,' surrounded by dark hexagonal basalt columns that inspired Hallgrímskirkja.
Skaftafellsjökull Viewpoint
Walk the easy flat path to the glacier tongue to see the retreating ice and the lagoon forming at its base.
Campsite Dinner
Stay at the Skaftafell campsite (available for tents/vans) for a true wilderness experience under the midnight sun.
Day 7: Jökulsárlón, Iceland - Icebergs & Diamonds
Jökulsárlón Glacier Lagoon
Watch massive icebergs drift from the glacier toward the sea. It’s a free natural spectacle unlike any other.
Diamond Beach
Walk across the road to see the icebergs washed up on the black sand, sparkling like diamonds in the sun.
Fjallsárlón Lagoon
Visit the smaller, quieter neighbor of Jökulsárlón for a more peaceful glacier experience without the crowds.
Bus to Höfn
Continue to the fishing town of Höfn to rest for the night before heading to the East Fjords.
Day 8: Egilsstaðir, Iceland - Entering the East
Coastal Bus Route to the East
Enjoy one of Iceland's most scenic drives, winding through deep fjords and passing steep mountainsides.
Arrival in Egilsstaðir
The main hub of the East. Check into the HI Hostel and explore the banks of the Lagarfljót lake.
Lagarfljót Lake Walk
Look for the 'Lagarfljót Worm,' Iceland's version of the Loch Ness Monster, while walking the serene trails.
Netto Grocery Shop
Restock on supplies at the local Netto supermarket to prepare for your hike tomorrow.
Day 9: Seyðisfjörður, Iceland - The Rainbow Path
Local Bus to Seyðisfjörður
Cross the high mountain pass to reach this artistic village nestled at the end of a long fjord.
Rainbow Street & Blue Church
Walk the famous painted street leading to the quaint Seyðisfjarðarkirkja for the perfect photo op.
Tvisongur Sound Sculpture
Hike up the hillside to these concrete domes designed to amplify the acoustics of the wind and voices.
Fjord-side Relaxation
Sit by the water and watch the ferry from Denmark arrive—a unique sight in this remote corner of Iceland.
Day 10: Mývatn, Iceland - Volcanic Wonderland
Bus to Lake Mývatn
Head north across the desolate highlands to reach the geologically active Mývatn region.
Hverir Geothermal Area
Explore the bubbling mud pools and steaming fumaroles. The orange landscape feels like walking on Mars.
Grjótagjá Cave
Visit the famous lava cave once used for bathing (and featured in Game of Thrones). Entry is free but swimming is prohibited.
Dimmuborgir Lava Formations
Walk through the 'Dark Castles,' a labyrinth of massive lava structures and caves.
Day 11: Akureyri, Iceland - Capital of the North
Arrival in Akureyri
Iceland's second-largest city. It’s surprisingly cosmopolitan with a beautiful harbor and mountain backdrop.
Akureyri Botanical Garden
One of the northernmost botanical gardens in the world. It’s a free, lush oasis in the middle of the city.
Akureyrarkirkja
Climb the steps to the city’s landmark church, designed by the same architect as Hallgrímskirkja.
Free City Bus
Take advantage of Akureyri’s free municipal bus system to explore the outskirts of the city.
Day 12: Siglufjörður, Iceland - The Herring Town
Bus to Siglufjörður
Travel through tunnels and along the northern coast to this historic fishing village.
Harbor Walk
Admire the colorful restored buildings from the 'Herring Era' and the dramatic surrounding mountains.
The Herring Era Museum (Exterior)
While the museum has a fee, the surrounding historic pier area is free to wander and highly photogenic.
Return to Akureyri
Catch the evening bus back to Akureyri for your final night in the north.
Day 13: Borgarnes, Iceland - Saga Land
Long Bus Ride West
Settle in for a long journey through the rolling valleys and horse farms of West Iceland.
Arrival in Borgarnes
A historic town situated on a scenic fjord. Check into your local guesthouse or hostel.
Skallagrímsgarður Park
Visit this local park featuring a burial mound from the Icelandic Sagas and beautiful flora.
Cook-out with Local Lamb
Pick up some Icelandic lamb at Krónan grocery store for a budget-friendly gourmet hostel meal.
Day 14: Snæfellsnes, Iceland - Kirkjufell & Beyond
Bus to Grundarfjörður
Travel to the Snæfellsnes Peninsula, often called 'Iceland in Miniature' for its diverse landscapes.
Kirkjufell Mountain
See the most photographed mountain in Iceland. The view of the mountain with Kirkjufellsfoss waterfall is free.
Berserkjahraun Lava Field
Explore the rugged 4,000-year-old lava field nearby, filled with moss-covered rocks and folklore.
Grundarfjörður Harbor
Watch the fishing boats come in against the backdrop of the iconic mountain peak.
Day 15: Reykjavik, Iceland - Final Farewells
Bus back to Reykjavik
Complete the loop as you return to the capital for your final full day in the country.
Kolaportið Flea Market
If it's a weekend, browse this harbor market for vintage Icelandic sweaters (Lopapeysa) and fermented shark samples.
Grótta Lighthouse Walk
Take a long walk or local bus to the edge of the Seltjarnarnes peninsula for sunset views and a tiny foot bath.
Farewell Hot Dog
One last 'pylsur' at Bæjarins Beztu—join the queue for the most affordable and famous meal in town.
Day 16: Departure, Iceland - Homeward Bound
Last Minute Souvenirs
Pick up some Icelandic sea salt or chocolate at a local supermarket for the best prices.
Bus 55 to Keflavík
Use the local bus 55 for the most budget-friendly way back to the airport.
Airport Check-in
Arrive early to navigate the self-service kiosks and prepare for your flight home.
Departure
Take flight, carrying memories of glaciers, waterfalls, and the rugged beauty of Iceland.
Best Time to Visit Iceland
For budget backpackers, the best time to visit is during the 'shoulder seasons' of late May to early June or September. During these windows, the weather is manageable, the days are long (Midnight Sun in June), and most bus routes are operational. Visiting in winter is cheaper for accommodation but many public bus routes are restricted, and the extreme cold requires more expensive gear.
Currency & Money
The currency is the Icelandic Króna (ISK). Iceland is nearly 100% cashless; you can pay for even a single hot dog with a credit or debit card. Tipping is not expected and is already included in service charges. To save money, always select 'Pay in Local Currency' at ATMs and card terminals to avoid poor exchange rates.
Getting Around Iceland
The primary intercity transport is the Strætó bus network. For a 16-day trip, consider the 'South Coast' or 'Full Ring' passes if available, which can offer significant savings. Note that Iceland has no railway system. Domestic flights are available from Reykjavik to Akureyri or Egilsstaðir but are usually outside a lean budget. Walking and local city buses are your best friends in Reykjavik and Akureyri.
